The Invisible Bond Vigilantes Have Appeared

Interest rates on Treasuries have surged in the wake of the tax cut capitulation:

Treasury prices dropped Tuesday, pushing 10-year yields up by the most since June 2009, after Congress and the White House compromised on a tax package that is expected to raise the deficit and increase the government's borrowing needs.

The drop in prices, which move inversely to yields, extended further after the government's first of three auctions this week drew tepid demand from investors.

Go figure. Barack Obama has managed to capitulated his way into pushing interest rates up.

That will help the economy.