Erik Norland, CME Group Is the growing budget deficit distorting the yield curve? The yield curves are diverging at both the long and short end.At the short end, U.S. LIBOR rates have risen relative to three-month T-bills. At the long end, Treasury yields are higher than swap rates. Erik Norland, Senior Economist at CME Group, examines how the growing budget deficit might be distorting the yield curve.