Normal Interest Rates: What The Debt Panic Gets Wrong

U.S. bond yields hitting the highest level since 2007 has sparked a renewed “debt panic” debate, but the argument misses what matters most for growth, according to this analysis. It says a 5% long-term yield is not a crisis in itself—it’s a price. The real outlier was the 15-year era when money was unusually cheap, shaped by near-zero rates and four rounds of quantitative easing that trained investors to treat liquidity as “free.” Using the Federal Reserve’s daily constant-maturity series back to 1962, the piece estimates today’s real long yield near 2.8% is close to the pre-crisis norm and far from record highs.