Global Markets Daily: G10 Rates Views—Lower Vol, Not Yields

Research evidence excerpt

Global Markets Daily: G10 Rates Views—Lower Vol, Not Yields

Economics Research

22 June 2026 | 3:16AM EDT

n G10 rates markets are pricing the bulk of inflation relief from lower energy William Marshall

+1(212)357-0413 |

prices, leaving significant near-term declines in yields unlikely in our view. william.c.marshall@gs.com

Goldman Sachs & Co. LLC

Differences in domestic fundamentals and central bank reaction functions are

George Cole

likely to drive relative performance, with a lower volatility regime likely in most +44(20)7552-1214 | george.cole@gs.com

markets. Goldman Sachs International

n Hawkish Fed communication and resilient US growth should sustain a wider

distribution around the US front-end and present an obstacle to meaningful US

outperformance versus other markets. Fundamental weakness and elevated hike

premium leave the UK front-end the clearest long.

n The belly of US and European curves should outperform, whereas we see a

clearer case for steepening the UK curve given the overhang of macro and fiscal

risk premia. Despite elevated levels and a path towards flattening, the belly of the

JGB curve is likely to continue to underperform.

n Limited room for materially lower yields leaves carry an important part of rates

portfolios. Our preferences are to be long front-end swap spreads in the US and

EGB spreads in Europe, along with select steepening/roll-down expressions.

G10 Rates Views—Lower Vol, Not Yields

1. Narrowing the range of outcomes. The decline in oil prices has reduced the risk

of severe energy-price inflation for global rates markets. With yields in most markets

off the conflict highs, we think markets are already pricing the bulk of this inflation

relief, and that significant near-term declines in yields are unlikely. Even if