Treasury bond prices sank for the second day on Wednesday

Teasury bond prices sank for the second day on Wednesday due to the deal to extend tax cuts enacted during George W. Bush presidency, according to Reuters. I wrote on August 23 on 'Increase on capital taxation for 2011' that in 2011 those benefits of tax cuts would expire because the american debt should climb to 13,7 billion dollar or 65% of GDP in the end of 2010. So, raising tax would control that deficit. But the current economic scenario says that is better to keep the tax cuts to generate a stimulus to the economic growth but can increase a fear of inflation, affecting directly on teasury bonds because the market believes that it can mean an increase in interest rates. So today the dollar rose againt a basket major currencies due to that perceptions about the american economy and pushing up the gold price. You can see on the chart below that investors are running to conservative assets such as gold and the price of 10 year bond interest rate is moderately getting higer because investors require more return in that kind of asset.