How extraordinary. The “real” interest rate on the 10 year bond is precisely zero. The nominal rate is slightly over 2%, precisely matching inflation. In other words, the market believes the probability that the U.S. will default on its long-term debt is zero. No chance at all. Zilch.
Here’s Professor Brad DeLong:
10-Year Real Treasury Rate at Zero
Time for everybody who has publicly worried about “crowding out” or about the deficit raising U.S. interest rates to make their Apology to the Emperor, and be quiet for llife.