The ‘Martian alien’ test of US 10-year yields indicates the Fed isn’t done raising rates yet.

ING says 10-year US Treasuries are “not trading in a manner consistent with previous peaks” in US interest rates.

According to him, extrapolation carries the risk of a 5% return:

• The 10-year yield remained high, which is not what one would expect if the Fed were to finish raising interest rates.
• “If a Martian alien had landed on Earth and simply looked at the current trend in the 10-year yield, they would probably conclude that the Fed has not peaked at all.”

ING highlights strong labor market data and rising inflation.

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The chart shows the 10-year yield, in weekly candles: