Dutch bank ING is highlighting potential upside in the 10-year U.S. Treasury yield, now at 4.09%, a development that could weigh on riskier assets like cryptocurrencies. Despite weak economic data, including November’s ADP employment report—the third contraction in five months—the yield has held above 4%, aligning with CoinDesk’s outlook.
“Treasuries love that 4% to 4.1% trading range. Temporary break below more likely. But break above has more legs,” ING said in a note to clients Thursday.
The yield briefly fell to 4.06% after the ADP report but quickly rebounded, defying the usual trend where soft labor and inflation data point to lower rates. Even with an 87% probability of a Federal Reserve rate cut this month, the 10-year yield has remained largely between 4% and 4.20% since September.
ING credits this resilience to structural shifts in the U.S. economy, where productivity gains—partly driven by AI—are increasingly fueling growth over employment. “Fewer net immigrants reduce the need for job creation, while productivity growth is driving expansion,” the analysts noted.
Looking ahead, Friday’s personal consumption expenditures (PCE) report could introduce volatility. A softer reading might push yields below 4% temporarily, while a decisive move above 4.1% could signal a more sustained trend, influencing markets well into 2026.
