Rates Spark

Latest edition · September 2, 2026

ING Think rates spark so how bad could this whole thing get

ING expects long-dated bond yields to climb further, with the US 10-year Treasury likely testing 5.0% and the 30-year testing 5.5% amid high fiscal deficits and rising real rates. While the base case foresees yields peaking and retreating from these levels, plausible extremes could see the US 30-year reach 6% and the eurozone long end touch 4%.

In this Rates Spark note, ING assesses how severe the sell-off in long-end government bonds could become. With US inflation at 3+% and the fiscal deficit exceeding 6% of GDP, yields are running about 30bp above normal valuation benchmarks. The increase is predominantly driven by higher real yields, influenced by heavy debt issuance and potential AI-led secular productivity growth. ING's base case projects the US 10-year to test 5.0% (from 4.8%) and the 30-year to approach 5.5% (from 5.25%), which would pull 10-year and 30-year Euribor rates to 3.5% and 3.6% respectively. In an absolute risk case reminiscent of the 2000 dot-com era, US 30-year yields could reach 6.0% and eurozone long rates 4.0%, though such extreme spikes would likely trigger self-correcting crisis dynamics.

Key takeaways from the latest edition

• 1.ING's base case expects the US 10-year Treasury yield to test 5.0% (from 4.8%) and the 30-year to approach 5.5% (from 5.25%) before retreating.
• 2.Yield pressures are primarily driven by rising real yields reflecting heavy fiscal issuance and secular AI-driven productivity growth, rather than higher inflation alone.
• 3.European long rates face upward pressure from US spillover, domestic defense spending requirements, energy shocks, and relative-value repricing against Japanese yields.

What this series covers

• The drivers of higher long tenor yields
• Our base case, and painting some extremes
• Author
• Disclaimer

Edition archive

• ING Think rates spark so how bad could this whole thing get

  September 2, 2026

• ING Think rates spark different parts of the curve different dynamics

  September 1, 2026

• ING Think rates spark hawkish ecb not helping french government bonds

  August 27, 2026

• ING Think rates spark us pce and jackson hole

  August 26, 2026

• ING Think rates spark markets not pricing volatile times

  August 25, 2026

• ING Think rates spark its about bigger buybacks not how its financed

  August 24, 2026