"Interest rates do not just go up because of inflation fears," he said.

"Anything above a 0.6 percent increase will probably fuel inflation fears."

But inflation fears have edged up a bit in the last couple of weeks.

Inflation fears lie behind gold's move, but not everyone is frightened.

For that reason, he said the market could rally in the second half of the year as inflation fears ease.

Inflation fears hit the financial markets hard for a second straight session yesterday.

The Treasury market, ever sensitive to inflation fears, took a direct hit.

What really set off the inflation fears was the trade-deficit figure for March.

Of course, bond funds have been hurt by rising interest rates and inflation fears.

In early 1989, like now, inflation fears pushed bond yields through 9 percent.