The Bond Market Is Getting Awfully ‘Yippy’ Again
Soft demand at an auction of 20-year Treasury securities underscores the concern about rising debt and deficits in the US.
Someone isn’t happy.
Photographer: Ting Shen/Bloomberg via Getty Images
US government debt auctions are generally sleepy affairs — except when they’re not. And Wednesday’s sale by the Treasury Department of $16 billion in 20-year bonds definitely qualified for the latter category. It’s unlikely to be the only one.
The offering was the government’s first auction of so-called coupon-bearing debt since Moody’s Ratings on Friday became the last of the three big creditassessors to strip the US of its top triple-A rating, following S&P Global Ratings in 2011 and Fitch Ratings in 2023. The auction was considered subpar on at least two critical measures, the amount of bids received from investors relative to the amount being sold, and the higher interest rate investors demanded relative to where the bonds were trading in the so-called when issued market before the sale.