ING: Widening US Treasury swap spread could intensify risk-off sentiment

An analysis suggests that if the 10-year U.S. Treasury swap spread—the difference between Treasury yields and interbank lending rates—exceeds 60 basis points, it could increase pressure on the broader financial markets. According to CoinDesk, the head of Americas research at ING explained in a report that the spread should be closely monitored. While it is currently below 50 basis points, a rise to 60 basis points could amplify market instability. This is because it goes beyond psychological factors to raise the actual borrowing costs for the U.S. government, making it more expensive to issue new debt amid its massive debt load. Ultimately, this could lead to tighter credit conditions across the financial system and intensify risk-off sentiment for assets like stocks and Bitcoin, the analyst noted.