Already low Treasury yields will most likely not fall much further, says Kathy Jones, fixed income strategist at Charles Schwab. Likewise, muni bonds are also fairly valued, primarily due to limited supply as a result of austerity at the local level. Furthermore, Jones views investment grade corporate bonds as being fairly valued with spreads increasingly tight. The one class of bonds she is most worried about is high yield which she says are way too rich. Jones says bondholders should pare down their exposure to junk because investors have grown too complacent and yields are way too low to compensate for the risk.