Summary

• The 10-year Treasury yield closed last Friday at 4.60%, the highest since May 2025, prompting a fresh round of doom forecasts.
• Over six decades, the 10-year yield and nominal GDP growth move together in a stable long-run relationship, with yields averaging about three-quarters of a percentage point below nominal growth.
• Debt and deficits don't reliably push yields higher.
• The strongest worry isn't default; it's debt services crowding out other spending.
• Oil shocks historically end in disinflation and lower yields, not a permanent paradigm shift.

Last Friday closed with the 10-year Treasury yield at 4.60%, a one-year high, and the doom commentary about rising interest rates was waiting before the bell even rang. Hyperinflation. Bond market breakdown. Paradigm shift. A 1981 fair-value retest. The Fed is about

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