Treasuries Lose Their Anchor as Real Yields Break Higher

ING Bank / Bond

20-05-2026

ING warns that the recent selloff in U.S. Treasuries is becoming more structurally concerning, as rising real yields—not inflation expectations—drive long-end rates sharply higher.

The U.S. 10-year Treasury yield climbed above 4.65%, with ING warning an overshoot toward 5% can no longer be ruled out.
Unlike prior inflation scares, the recent move has been driven primarily by higher real yields, signalling either stronger growth expectations or deteriorating demand for duration.
Treasury markets failed to attract major buyers even after breaching the historically attractive 4.5% threshold.
ING argues that even a reopening of the Strait of Hormuz may not bring yields sharply lower if real rates remain elevated.

The implication is significant: markets may be entering a regime where U.S. yields no longer fall automatically during geopolitical stress.