Banking, finance, and taxes
Ten-Year Treasury Auction Shows Big Bias Reversal From Two Weeks Ago
Published:
It has only been about 10 days since we pondered whether the bond rally was signaling the risk of a recession or something else negative in a flight to safety trade. And now a 10-year Treasury auction has gone off rather poorly, and suddenly 10-year Treasury rates are up almost 20 basis points from their lows less than two weeks ago.
The Treasury’s 10-year note auction of a 2.5% coupon went off with a high yield of 2.648%, with some 96.96% allotted at the high yield for a price of 98.714636. These are technically nine years and 11 months to the May 15, 2024, maturity.
The bid-to-offer rate was 2.88, implying that $2.88 was tendered for every $1 accepted by the Treasury.
Primary dealers tendered the most at $40.238 billion, but only $9.33 billion was accepted. Direct bids, non-primary dealers bidding for their own accounts, were $5.915 billion, with almost 44.07 billion accepted. Indirect bids, which include foreign bank demand, had over $14.35 billion tendered and $7.56 billion accepted.
Wednesday’s 10-year Treasury auction may not be a disaster for rates, but this may set the tone for a weaker 30-year Treasury auction due on Thursday.
Poor demand in an auction just two weeks after a bottom in yields generally signals one of two things: 1) the economy is getting better, or 2) no one wants to loan Uncle Sam money this low for 10 years.
ALSO READ: The 10 Best Chinese Stocks to Own Now
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
