Treasury yields rise as equities rise

I'm not surprised at all to see Treasury bond yields rise in line with rising equity prices. They are both telling the same story: the economy is not collapsing; the economy is probably bottoming and may even be turning up somewhat; and deflation risk has all but disappeared. Neither market yet signals a recovery or rising inflation. Neither market is saying anything yet about the huge fiscal drag that Obama's policies represent (i.e., greater government intervention in the economy, increased regulatory burdens, increased tax burdens). And as I've said before, higher Treasury yields are far from being a threat to the economy; the yields on corporate bonds are still declining even as Treasury yields rise. The spread between the two leaves lots of room for these trends to continue.