This is sort of a complicated question, in large part because we don't really know where interest rates will go and in what time-frame.
If you believe interest rates will rise significantly in the short to medium term, you're better off in cash. In a rising rate environment, bond prices will fall and the rate you earn on cash/money market accounts will rise.
However, it could be years before rates rise meaningfully, in which case the extra yield you earn in bonds can significantly contribute to portfolio performance. Rates would have to rise pretty quickly for you to lose money on a break-even basis.
Bonds (at least government bonds) also act as a portfolio diversifier, rising as stocks fall. So you have to consider a bond allocation from a porfolio construction basis as well.
As usual, your best bet is to come up with an asset allocation plan and stick to it, rather than trying to time or predict the market. If the US turns out to be like Japan in the early 90's your portfolio would benefit tremendously from a bond allocation.