ING Flags Upside Potential in 10-Year U.S. Treasury Yield

In a piece of bad news for crypto bulls, analysts at Dutch bank ING highlighted the breakout potential in the 10-year U.S. Treasury yield, currently 4.09%, consistent with CoinDesk's outlook.

The yield has shown resilience, holding above 4% despite several soft economic readings, including Wednesday's negative ADP employment report for November, which marked the third contraction in five months. A higher yield could tighten financial conditions, disincentivize risk-taking and weigh on riskier assets including cryptocurrencies.

"Treasuries love that 4% to 4.1% trading range. Temporary break below more likely. But break above has more legs," the bank said in an analyst note to clients on Thursday.

The yield, the U.S. government's benchmark borrowing cost, fell 2 basis points to 4.06% following the ADP report and then quickly reversed. That was unusual. Weak labor data and subdued inflation headlines are usually a signal that interest rates are headed lower to boost the economy.

The same holds for Federal Reserve interest-rate cut expectations, which have surged to an 87% chance of a reduction this month. Yet the 10-year yield has traded between 4% and 4.20% since September, a key point CoinDesk highlighted earlier this week.​

ING attributes this stickiness to structural shifts in the U.S. economy, where productivity gains partially driven by artificial intelligence, are playing a bigger role than employment in driving growth.

"Treasuries have built a bit of resilience to the weak jobs narrative," the analysts wrote. "Partly as there are fewer immigrants coming into the country in net terms, requiring less employment generation. But also as its productivity growth rather than employment growth driving things into the future (AI, among others)."

Friday's personal consumption expenditures (PCE) report could generate volatility in the 10-year yield.

According to ING, a softer report might send yields below 4%, but any dip is likely to be temporary. A decisive break above 4.1%, on the other hand, could be more structural, potentially setting the tone well into 2026.