Both offer liquidity if you need it. My 11 month cd's only require me to surrender 30 days of interest to liquidate, and I broke them down into 10k, 5k and 2.5k (the minimum) chunks so if doomsday does arrive and I have to dip into them, I only have to break a small one.
People wont automatically "run to bonds" if the stock market tanks, although thats a good bet. That wont automatically result in a big run up in bond NAV's though, although again thats a good bet.
It may also be a mistake to presume we're going to see continued rising rates...the economy looks like it may be dropping back into neutral and the ECRI leading economic indicators say we're going to start backsliding and re-enter a deflationary period starting later this year and persisting for at least 9 months...which means the fed might actually be forced to cut again to restimulate...or at least remain neutral in bias and quack a lot until things pick back up.
http://www.businesscycle.com/
In other words, nothing is any different...we really have no idea whats going to happen. So allocate your assets in line with the number of years until retirement, choose at least a stock/bond/cash allocation thats true to that, add some other classes (foreign, reit, etc) a la "the four pillars" if you want to get fancy, and let it ride.
In your situation, at your age, if you dont plan to retire for 20+ years, a 70/20/10 stock/bond/fixed income or thereabouts is probably ok.
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