Not a lot of action this week. A $13 billion 20-year bond auction on Wednesday went off fairly well. Interest rate at 4.81%, up a fair amount from last month’s 4.63%, but about as expected. Demand was pretty good–with foreign buyers pretty strong and some domestic interest. Then on Thursday there was a $25 billion 5-year TIPS auction–these are bonds that pay interest at a rate above inflation. This auction also appeared to go off about as expected, with somewhat weak demand. I would have thought there might be higher demand if people anticipate that inflation may accelerate. The US debt market is kind of in suspension right now, waiting to see how the tariff chaos plays out, what the impact on inflation is, what happens with federal spending, etc.
