Another of Your Regular US Debt Sales Updates

Another day, another record size auction of US debt, this time $70 billion in 5 year notes.  At this point we are selling debt to make interest payments on the debt.  You can imagine how that works out.  Demand is increasingly concentrated at the very short end.  In contrast to Tuesday’s two year note auction, this one had weak demand characteristics and had to be sold at slightly above the desired interest rate.  The rate was 4.65%, well above a two-year auction from just last month, at 4.235%.  And by contrast, one year ago the five-year rate was 3.66%; two years ago it was .82% and 5 years ago, so the debt being rolled over now, it was 2.29%.  The overall average rate across all maturities of US debt is rising rapidly, contributing to that much higher total interest payment burden.   (ZH Post)