Interest rates are at or near historic lows, whether we are talking about the Fed Funds rate or the rate on treasury bonds. The question is, is this a bubble? The answer is probably "yes", but it doesn't mean you should be shorting bonds right now either. If and when it becomes more evident that the economy is in bad shape, there might continue to be a flight to safety. For many people, that means bonds. I am not saying that this is logically correct, but who can argue with the market?

If the stock market goes into free fall, there is a good chance that bonds will continue to do well in the short-term and may even increase significantly in value. An additional reason to not short bonds is because you will be fighting against the Fed. The Fed creates inflation which can ultimately hurt bonds, but the Fed creates inflation by buying assets, the biggest asset being bonds. I would not fight against the trend at this point. Interest rates will finally go up some day in the future, but I wouldn't gamble a lot of money on that day being soon.