Everyone seems all hot and bothered...

...by the yield on the 10-year note, which went back over 3.5% on Wednesday for the first time since November. Commentators on CNBC were practically hyperventilating. "The deficit is too large!" shrieked one. "Inflation is coming back!" cried another. Calm down, I say. Maybe interest rates are just returning to normal levels. Since 1968 the 10-year note has traded mostly above 5%. Last fall the planet gazed into the abyss and there was an understandable flight to quality. Now that the economy may be steadying, investors are looking to take a little more risk and are moving back into equities. I'm guessing that the higher yields are forecasting a recovery, not necessarily inflation. Remember, Reagan ran up the deficit to record peace-time levels in the 1980s and inflation eased. Tell that to the teabaggers.