In disappointing news for crypto enthusiasts, analysts from Dutch bank ING have pointed out the breakout potential of the 10-year U.S. Treasury yield, which currently stands at 4.09%, aligning with CoinDesk’s predictions.
The yield has remained robust, staying above 4% despite several weak economic indicators, such as Wednesday’s negative ADP employment report for November, marking the third contraction in five months. An increasing yield could tighten financial conditions, hinder risk-taking, and impact riskier assets, including cryptocurrencies.
“Treasuries favor a trading range of 4% to 4.1%. A temporary break below seems more likely, but a break above could have more longevity,” the bank stated in an analyst note to clients on Thursday.
The yield, which is the benchmark borrowing cost for the U.S. government, dipped 2 basis points to 4.06% after the ADP report but quickly rebounded. This is noteworthy, as weak labor data and low inflation typically indicate that interest rates will decline to support the economy.
This trend also applies to Federal Reserve expectations for interest rate cuts, which have surged to an 87% probability of a reduction this month. However, the 10-year yield has fluctuated between 4% and 4.20% since September, a crucial point CoinDesk noted earlier this week.
ING attributes this persistence to structural changes in the U.S. economy, where productivity improvements—partly driven by artificial intelligence—are becoming more significant than employment in fueling growth.
“Treasuries have shown a degree of resilience against the weak job narrative,” the analysts wrote. “This is partly due to fewer immigrants entering the country in net terms, which reduces the need for job creation. Additionally, it’s productivity growth rather than employment growth that is expected to drive future developments (AI and others).
The personal consumption expenditures (PCE) report due on Friday could lead to volatility in the 10-year yield.
According to ING, a weaker report could push yields below 4%, although any decrease is likely to be short-lived. Conversely, a significant break above 4.1% could indicate a more lasting shift, potentially affecting the landscape into 2026.
