The yield on the 10 year Treasury hit 4.8% this week, which is an unwelcome two-year high. Rising borrowing costs depress the stock market and add to the federal interest expenses. Is this the bond market telling Washington to slow down the debt spending? Maybe.

10 Year Treasury Interest Rate Over Past Year

But when we look at the same interest rate over the long term, we see that it rose above 15% in the 1970s, and the current rate is still somewhat below the average of the last 50 years.

Maybe the recent rise in rates is a return to normalcy. We think that Kevin Warsh’s commitment to price stability will bring the 10-year Treasury yield gradually down in the months ahead, but even where it is now is hardly high by historical standards.