CNBC reports that according to ING senior rates strategist Antoine Bouvet, the 10-year U.S. Treasury yield is likely to hit 2% by the end of the year but could spike “well above” that in the second quarter.

Bouvet told that the envisaged re-opening of the economy in the second quarter will result in strong retail sales on the back of the U.S. government’s stimulus package. 

All these factors will “contribute and conspire towards optimism in the market and then towards that spike in U.S. Treasurys,” Bouvet said, expecting yields to reach a “minimum” of 2%. 

The 10-year U.S. Treasury yield shot up from 1% since the end of January, amid concerns about rising inflation. These concerns have been compounded by fears that the U.S.  government’s $1.9 trillion fiscal relief package could stimulate the economy too quickly and cause a surge in prices. 

While Bouvet said a lot of that increase in inflation would be temporary, he said it would be interesting to see how the U.S. Federal Reserve reacts.

ING expected average inflation to reach 2.9% this year and stay at that level next year.