The US 10-year bond yield has hit 2%. It may well pause here in a narrow range around 2% for a bit, but beyond that analysts at ING view a rise to the 2.25% area as likely, as the real rate journies out of deep negative territory.
What the Fed does in March matters hugely
“We think the US 10yr is heading for 2.25%. Then, a Fed that delivers 50bp in March is more likely to be getting ahead of the curve which would help contain the 10yr cycle peak to the 2.25% area.”
“A tame 25bp hike with no bite could leave the market at least pondering a path towards 3% on the 10yr. We may not even get close, but on the table it is.”