Intermediate-term bonds - 5 to 10 years out - are the best place to be right now because the yield curve will flatten ahead of the Fed's rate hikes next year, hitting short and long term bonds the hardest, said Kathy Jones, fixed income strategist for Charles Schwab. Contrary to the view of hedge fund manager Stanley Druckenmiller, Jones said the economy is not strong enough for the Fed to raise rates much sooner than next year, despite the improving employment picture. She also said she prefers domestic to Europe bonds because of contracting credit and questionable bank strength in the Eurozone.

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