There is a huge difference between interest rate changes, which are set in large part by the Fed, versus deflation, which is not set by the Fed. The return on

There is a huge difference between interest rate changes, which are set in large part by the Fed, versus deflation, which is not set by the Fed. The return on a 10yr (govt bond I assume?) is set by the market - this is not just picked or changed arbitrarily, although returns there are likely influenced by Fed rates. People control the interest yield for many products through the Fed, so we can avoid a deflationary spiral just by having the Fed change the interbank loan rate (among other things they can do). Deflation (caused by many types of things from demand shocks to economic fears to war) is often not easily dialed back, and can lead to a deflationary spiral, which cannot be simply tuned by the Fed. This is the reason the Fed targets slight inflation instead of zero inflation; the controls are not magic and the inflation/deflation tends to hover around where the Fed targets, and by staying away from zero we avoid possibly triggering a deflationary spiral we cannot control. In short, we have good tools for dealing with inflation. We do not have equivalently good tools for dealing with deflation.