Goldman Sachs: G10 Rates Views and Long-End Yield Curve Outlook

Goldman Sachs argues that high term premiums and steep yield curves will persist across G10 bond markets due to AI borrowing, fiscal deficits, and energy volatility. Although debt managers are shortening issuance maturity, durable yield relief will only come from cyclical macro slowdowns, supporting a year-end 10y US Treasury forecast of 4.40% while JGBs underperform with yields rising toward 3.0%.

Key Takeaways

• 1.Ongoing energy volatility, heavy fiscal deficits, and the AI borrowing boom keep long-end G10 yields elevated, making steeper yield curves a structural feature of the rates landscape.
• 2.Treasury and debt management weighted average maturity (WAM) reductions and buybacks offer micro-level swap spread relief but cannot overcome broader macro drivers to lower long-term yields.
• 3.Cyclical relief points to US 10-year Treasury yields reaching 4.40% by year-end 2026, while Bund yields fall modestly to 3.0% and 10-year JGB forecast is revised upward to 3.0% from 2.5%.

Table of Contents

• G10 Rates Views—Shallow Relief For Long-End Woes
• 1. Borrowing boom, benign spot inflation, steeper curves.
• 2. Macro problems, micro solutions.
• 3. Cyclical risks now point to (shallow) relief for US rates.
• 4. High premium, low volatility.
• 5. Energy still the driver in Europe.
• 6. UK budget still all about the macro.
• 7. Making progress, but conditions not yet there to buy JGBs.
• 8. Different risks, similar themes for smaller G10 markets.
• TRADE IDEAS
• Best Trade Ideas Across Assets
• Global Interest Rates Strategy
• Disclosure Appendix

Report data

Exhibit 1: Higher long-end yields are a global phenomenon

Reports in this series

Global Markets Daily is shown in chronological order through this edition, published on August 27, 2026.

Part of the Global Markets Daily series — view all 6 editions

Looking for the latest edition? Global Markets Daily AI Haves vs. Have Nots Drive Divergence in Asian FX (Sep 1, 2026)

1. Jul 15Global Markets Daily Oil, the Fed, and AI(1)
2. Aug 11Global Markets Daily Fed Communication and FX Volatility
3. Aug 13Global Markets Daily Diesel, Not Crude, Remains the Cleaner Geopolitical Hedge
4. Aug 13Global Markets Daily Diesel, Not Crude, Remains the Cleaner Geopolitical Hedge

Document Preview

Page 1 of 5

Subscribe for full accessCreate free account