rise in bond yields good for economy, bad for fed?

The economy doing better is good news for the people and not really bad news for the Fed. Reserve. However, if yields on the 10-year bonds and all other federal debt instruments, like short term bills and notes rise, then that is very bad news for the federal government. Last year we spent about $360 billion to service the interest on the federal debt. If long-term interest rates double and the short term interest goes back to up to about 1% per year from the near nothing today, then it will take over $1 trillion to pay the interest on that $17 trillion federal debt we have now.

http://www.treasurydirect.gov/govt/reports/ir/ir_e...

a million.Bond yield is long-term, yield from inventory industry is short run. If the bond fee is extreme, the inventory industry would be down.Bonds would be much less costly to purchase. inventory industry is extra considerable to the financial device than bonds. 2. extreme bond yield reflexes extra threat. usa which has undertaking to pay decrease back or in disaster has to develop bond yields consisting of Greece, eire etc. 3. Bonds are government borrowing and characteristic much less threat in comparison with company bonds. yet it motives a crowding-out. which will harm the financial device contained for the era of finished employment.