Rates Outlook 2026: Situation Normal, All Fuddled Up

Our reversion to normal for 2026 is akin to a desperate 'I'm okay!' It's a normal that's far from boring, as it treks a narrow path along which the ECB holds at normal, the Fed gets to normal, and long-end rates get to levels that map out normal curves. We can go off track, the most pertinent being a deviant Federal Reserve, with varying effects on long-term rates

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Rates

Rates Outlook 2026: Situation Normal, All Fuddled Up

We're in a SNAFU situation: there’s a strong chance 2026 is another chaotic year for rates

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Rates

Lovin' normality, as the alternatives are troubling

We see the US 10yr yield heading to the 4.25% to 4.5% range

Rates

EUR rates: Short end settles as rest of the curve drifts higher

Longer rates will continue to drift higher as growth improves and supply pressures intensify

Rates

Dutch pension reforms are bumping up rates from the long end

A fundamental change in hedging strategy helps push 30Y rates higher

Rates

EUR government bond spreads: More convergence, waning dynamic

European government bonds will likely see more convergence amid Germany's fiscal expansion

Rates

EUR SSAs spreads: Tight levels, but the context is important

SSAs face headwinds from supply, but valuations elsewhere look even richer