ING analysts say the benchmark 10-year U.S. Treasury yield may climb further in the near term as markets reassess expectations around Federal Reserve rate cuts. With recent U.S. economic data showing persistent resilience, especially in labor markets and consumer spending, traders are scaling back bets on aggressive policy easing in early 2026.
According to ING, this shift is creating renewed upward pressure on long-term yields as investors demand higher compensation for holding long-dated government debt. The bank notes that while inflation has cooled from its 2022 highs, its descent has slowed, making the Fed more cautious about signaling premature cuts.
Market watchers add that rising supply of Treasury securities, tied to sustained government borrowing, is also influencing yield movements. If economic conditions remain firm, ING believes the 10-year yield could retest recent highs before stabilizing later in 2026.
