Report published September 25, 2026
Running from Rates: Bank of America Global Rates Strategy Analysis
Bank of America · September 25, 2026
BofA Global Research maintains a bearish rates bias, advocating for front-end shorts and curve flatteners across the US, Europe, and Australia as resilient growth and sticky inflation force central bank repricing. The team also highlights that Treasury diversification is increasingly state-dependent, recommending option overlays for tail risk.
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Finvaulta summarizes Bank of America's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.The rates bear market is persisting due to stop-outs in consensus longs and steepeners, with markets pressured to price further monetary tightening in the US, Euro Area, UK, and Australia.
- 2.In the US, strong economic momentum, elevated inflation, and heavy supply push rate expectations higher, supporting short 2y UST duration and 2s30s curve flattening.
- 3.BofA economists have upgraded central bank hike expectations across major markets, adding a December 2026 hike for the ECB and pricing two hikes for the BoE and RBA.
Table of Contents
- Core views, trades and forecasts
- The View
- Rates – US
- Rates – EU
- Rates – UK
- Rates – AU
- Rates – JP
- Rates – CA
- Front end – US
- Front end – EU
- Inflation – EU
- Special Topic – Linear exposure, nonlinear utility
- Technicals
- Rates Alpha trade recommendations
- Global rates forecasts
Report data
Exhibit 1: Global rates trade quilt — as of September 24, 2026.
| Metric | Estimate | Context |
|---|---|---|
| US 10-Year Treasury Yield Forecast (YE 2026) | 5.00% | BofA forecast for US 10-year Treasury note yield at year-end 2026. |
| German 10-Year Bund Yield Forecast (YE 2026) | 3.40% | Revised upward by 25bp reflecting delayed ECB rate cuts and additional tightening. |
| UK Central Government Net Cash Requirement (CGNCR) | 10.0 GBP bn | August CGNCR came in £2.1bn below the OBR forecast published in April 2026. |
| Bank of England Terminal Bank Rate Forecast | 4.25% | Economists expect hikes in Nov 2026 and Feb 2027 to take Bank Rate to 4.25%. |
| US 5Y Treasury Yield Peak | 4.99% | US 5Y yield broke above the October 2023 cycle high to establish a fresh high. |
Reports in this series
Global Rates Weekly is shown in chronological order through this edition, published on September 25, 2026.
Part of the Global Rates Weekly series — view all 8 editions
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