Why US Borrowing Costs Are Rising After The Fiscal Cliff Deal

Quick heads up.

US borrowing costs are rising today, in the wake of the Fiscal Cliff deal.

The yield on the 10-year bond are ticking up to 1.8178%.


Photo: Bloomberg


It has nothing to do with the deficit or the debt.

It’s just that this deal averts some concerns for the economy, and that means that safe-haven buying of US Treasuries goes away. It’s a good sign.

We think it’s important to bring this up now, because it’s only a matter of days before outlets like the WSJ start talking about how bond vigilantes are rebelling against large deficits. It couldn’t be further from the truth.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.