How ING Predicts the Treasury Yield’s Revenge: A Tale of Hope and Fear

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Markets

What to know:

  • ING analysts see a dazzling potential for the 10-year U.S. Treasury yield to do a jig-perhaps a breakout, if we’re feeling poetic.
  • If it dares to leap above 4.1%, we might be gazing upon a scene of seismic change, impacting markets all the way into 2026-yes, the year the robots finally take over (or so they say).
  • As the yield hardens like a stubborn mule, risk assets, including those mysterious cryptocurrencies, might just start sweating more than a cat in a sauna.

In what can only be described as a spectacular mix of bad news wrapped in economic confetti, our beloved Dutch bank ING has declared the 10-year U.S. Treasury yield a potential hero-or villain?-at 4.09%, aligning with CoinDesk’s daring outlook. 🎩✨

This yield, resilient as a cockroach in a catastrophe, refuses to drop below 4%, disregarding the soothing lullabies of soft economic reports. Even Wednesday’s ADP employment report, which sounded like a bad joke about jobs disappearing faster than socks in a dryer, couldn’t dampen its spirit. A higher yield might just tighten financial belts, discourage risk-hungry investors, and give cryptocurrencies a run for their money-literally.

“Treasuries prefer that cozy 4% to 4.1% comfort zone. A brief dip? Probably. But breaking above that? Now that’s a story with legs,” the wise analysts chirped in their note, sounding as confident as a fortune-teller on a sunny day.

The yield, that grim benchmark for U.S. borrowing costs, dipped 2 basis points to 4.06% after the ADP drama, only to perform an unexpected twirl and climb right back-like a rebellious teenager. Weak job data and fading inflation fears were supposed to signal lower rates, but the market was having none of it, behaving as if it had read the script backward.

Meanwhile, the Federal Reserve’s hopes of a rate cut soared to an astonishing 87%, because why not dream big? Yet, the 10-year yield has stubbornly danced between 4% and 4.20%, proving once again that markets are the ultimate drama queens. CoinDesk called this out earlier this week, and who are we to disagree?

ING attributes this stubborn resilience to structural shifts in the grand U.S. economy, where AI-powered productivity gains have become the new rock stars-outshining employment figures like a neon sign in Times Square. “Treasuries have gained some resilience to weak jobs stories,” they declared, as if talking about a hero of a Greek tragedy. “Partly because fewer immigrants mean less need for new jobs, and partly because growth is now driven more by robots and algorithms than by human labor.” 🤖

Expect the coming Friday’s personal consumption expenditures (PCE) report to shake things up-perhaps send yields below 4%, or maybe just give a fleeting wink before resuming its upward trek. A firm break above 4.1%? That’s when the plot thickens, potentially setting the tone for the next few years like a blockbuster sequel.

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2025-12-04 12:11