ING say that the US 10 year Treasury has "not been trading in a manner consistent with prior peaks" in US interest rates.
Says extrapolating leads to the risk of a 5% yield:
- 10-year yield has remained elevated, which is not what would be expected if the Fed was finished hiking interest rates
- "Had a Martian alien landed on earth and simply eyeballed the current movement of the 10-year yield, [it would] likely conclude that the Fed had not peaked at all"
ING point to firm labour market data and the nudge higher in inflation.
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Chart shows the 10 yr yield, weekly candles:
