Are 5 pct US 10-year yields and an S+P of 1475 possible in 2011?

Jim O'Neill appears to think so. One of the main reasons for the stock markets rise has been the constant lowering of interest, but now Goldman's Jim O'Neill thinks the opposite is also possible and not for the negative reasons. I think its not possible. Higher interest will kill the "recovering" housing market, will put more pressure on government finances and it will make bonds relatively more attractive than stocks. The only possible way is that we get high interest rate with a increasing stock markets is when we have hyperinflation. Zimbabwe has a high inflation, rising stock market and high interest rate and its not because their economy is doing so good. I would also like to note that FED is the largest owner of treasuries right now. They stand to loose a lot of money if interests go to 5%.