Another growth scare passes

I may be jumping the gun, but this chart of 10-yr Treasury yields tells me that the latest growth scare (i.e., that sovereign debt defaults in Europe could have spillover effects in the U.S. economy) is passing. When the market starts worrying about the health of the economy, we typically see equities decline and 10-yr Treasury yields decline—a flight to quality. When sentiment starts improving, equities rally and yields rise. I've tried to illustrate how to interpret the level of yields in the following chart. The recent decline in yields was a good sign, I think, that the market was really concerned that the economy was on the verge of a double-dip recession, and fears of a euro collapse were the catalyst. As justification, I would argue that 3% yields on 10-yr Treasuries only make sense, from an investor's point of view, if one believes that the economy is very unlikely to experience healthy growth and is instead vulnerable to recessionary conditions.