We're checking a down bond market today. I'm David Brancatia. The bond market is in a

funk this morning pushing the benchmark 10-year interest rate up sharply to 4.4

percent. The idea of interest rate staying higher longer has stock

investors also in a cautious mood. In early trading the Dow is down 488 points, 1.2 percent the S&P 500 is down 1 percent the NASDAQ down 1.4

percent let's get a sense of what market players are thinking by turning to Lindsay Piegsa.

She's the chief economist and managing director at the investment firm Stiefel.

Good morning.

Good morning.

I don't know, different mood here in the second quarter of this year which has just begun. I mean some of it is I think

the price of wholesale oil here up another 1.6% as we speak.

I would agree that the market appears to be responding to this

increased uncertainty and volatility in the energy market, potentially causing

an additional inflationary hicup for the Federal Reserve, which is still very desperate to see further disinflation or at least gain further confidence in the inflation data in order to provide reprieve from these relatively elevated levels of rates.

A lot of people are thinking maybe they would have started lowering rates maybe in June.

I don't know. What do you think?

Well I think there's a lot of unexpected strength in the economy,

particularly as we look at yesterday's ISM manufacturing index.

This showed the first expansion in one of the weakest segments of the US economy, a welcomed

confirmation to the chairman's assessment of solid US activity, but

potentially underscoring the uncertainty or the inability for the Fed to move forward with these rate cuts that the market seems so desperate to receive.

I know it's like our daily irony here, signs of strength which can be good for actual people who

need jobs and raises can delay interest rate increases.

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