Even a larger and longer-lasting rise in 10-year Treasury yields than the one seen in recent weeks is unlikely to derail the economic recovery. Just as tight credit conditions meant that the previous falls in borrowing costs did not stimulate demand by much, higher borrowing costs won’t hit demand much. And as long as any rise in Treasury yields is being driven by stronger news on the economy, higher yields won’t threaten the recovery. If they did, no economic recovery would ever last.
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