Shock, horror: US government bond rates are jumping. Soon, goes the story, long-term interest rates will leap, the Federal Reserve will monetise, inflation will soar and civilisation will end. Actually, no. What is happening is precisely the normalisation the Fed has sought. The government is not off the fiscal hook. But it does have at least some time.

The yield on 10-year US government bonds did jump by 0.2 percentage points on Wednesday, to 3.69 per cent, 1.61 percentage points above the low reached in December 2008. True, too, US bond yields were 0.13 percentage points higher than those on German bunds. At one point in December 2009, they were 0.86 percentage points lower. But none of this should be very worrying. It is what ought to happen.