It happened like clockwork. Something nudges long-term interest rates above 4% and a perfectly good rally in the stock market evaporates. This time, the trigger was a shock cut to the Treasury’s credit rating . . . a significant shift in the bond market but not necessarily anything the rest of Wall Street needs to worry about.

Most of the big players blew off the downgrade. Warren Buffett, Jamie Dimon, Janet Yellen, everyone. The rating agency that pulled the trigger is relatively minor, with maybe 15% of the global heft in this space. Neither of the true giants spoke up.

And the timing of this downgrade is strange to say the least. It feels like a PR stunt, a desperate reach for relevance. But for now, that 15% of the world that pays attention now needs to adjust its bond portfolios to mirror this move, which means selling Treasury debt to make room for whatever this agency decides is still worth its top rating.

Demand for Treasury bonds goes down a bit. And the laws of economics say that when demand for a thing suddenly drops, the price drops with it. When bond prices drop, yields go up. Suddenly yields are above 4%.

This is a historical pain point for the market. Round numbers scare people. The thought is that if you can lock in 4% a year on bonds for the foreseeable future, enough investors will pull their money out of stocks to buy those bonds.

But wait a minute. Money flowing out of stocks into bonds means demand for bonds picks up again. Prices in this scenario firm up. And guess what, yields go down. The situation just resolved itself.

That’s how this works. It’s how it worked in 2011 and it’s how it’s going to work now. Yields have had trouble even getting above 4% in this cycle. It’s going to take a massive shift in the landscape to get them permanently above that level now.

If you’re worried about yields, buy bonds when they hit 4%. And if you’re unwilling to buy bonds at 4%, stick with the stocks that can deliver better under the right circumstances. Beyond that, 4% is just a number.

After all, there are two things here to keep in mind. First and foremost, when long bond yields are stuck at roughly 4% and the Fed has pushed short-term rates well above 5%, the system is showing dramatic signs of stress.

That’s the inverted yield curve that tends to foreshadow a recession. The Fed controls the short end. The market decides the long end. When the market keeps buying so many Treasury bonds that long yields stay below short yields, the market is already so fixated on an economic downturn ahead that the prophecy becomes self fulfilling.

But if long-term Treasury yields were to rise back above the short end of the curve, I guess that recession signal goes away, doesn’t it? Keep that in mind when people talk about how lethal 4% really is. The only way this curve can heal is if those long yields climb well above 4% or if the Fed wakes up and decides there’s been a terrible mistake.

You know the first scenario is the only plausible one. And that’s the second factor to watch. I remember back to 1994, when Treasury yields started at 5.92% and crossed 8% by November.

They didn’t get back below 5.5% until 1998. That’s at least four years the world survived yields much higher than 4% . . . a period in which the S&P 500 doubled. It was the dot-com boom, one of the greatest rallies in history. And it happened in the face of those rates.

What’s lethal about 4% yields? Fear itself. We’ll get through this. Stocks will recover and get back to work. If yields stay above 4%, it’s going to be a lot harder to argue that there’s a recession looming. And if they fall below 4%, where does all that fear go?