Interest rate volatility is up a whopping 36% in the past 10 days, Jon Najarian, co-founder of optionmonster.com and trademonster.com, said on CNBC's "Fast Money Halftime Report." However, he is expecting a less-than-stellar labor report on Friday, which will likely cause bonds to rally and yields to fall.
Joseph Terranova, senior managing director at Virtus Investment Partners, disagreed, saying he expects rates will rise once the non-farm payrolls report for April is released. He said most investors likely believe rates will rise and bonds will fall but are too scared to sell bonds.
He's concerned as well about the lack of liquidity in the fixed-income market, particularly in the high yield market, such as the iShares High Yield Corporate Bond ETF (HYG).
Real estate is such a long-term play for most investors and developers that the day-to-day moves in interest rates have no effect on the industry, according to Tom Barrack, CEO of Colony Capital, which has $19 billion in assets under management.
In this sense, real estate is far more "insulated" from interest rate movements than stocks are, he added.
The recent market sentiment data were the most bearish that it's been since April 2013, said Josh Brown, CEO and co-founder of Ritholtz Wealth Management. It's a good thing investors are on edge because otherwise they would be too exuberant and the market would become overvalued, he said.