Rising Treasury yields do not necessarily signal an impending crisis. They reflect a mix of forces, including stronger economic growth, inflation uncertainty, continued elevated government borrowing, AI capex funding, and increased uncertainty around the monetary and fiscal reaction function of the Fed and Treasury, respectively. This has resulted in an increase in the term premium, meaning the additional yield investors demand in exchange for lending over longer periods. The era of easy money is over. Markets are grappling with what the cost of capital ought to be in this new regime. […]