A kind of big week for debt sales, kicked off on Tuesday with $58 billion in 3-year notes. Not a great auction but not truly awful, that will likely happen later in the week. The high interest rate was up substantially from last month, although a little lower that expected. Demand was mediocre, and once again domestic buyers had to step in as foreign ones lowered their proportion of the auction.
Wednesday, even worse, an auction of $39 billion in ten-year notes priced at a high yield above last month and above expectations. Foreign demand and overall demand remained weak. Domestic demand is saving these auctions from being outright disasters right now.
Finally, the week was capped off with a 30 year bond auction on Thursday, currently the longest maturity offered by the US. $22 billion was sold at a high yield of 4.73%. Once more I will remind everyone that these yields are far higher than they were two or three years ago, adding to our interest rate burden. The interest rate was higher than last month and slightly higher than expected. Foreign demand was actually good for this auction, as those buyers took about 65% of the offering and domestic buyers were good as well.
Big picture–another week of adding to both the federal interest payments which are causing big deficits and to our massive debt pile. Secretary Bessent made a big deal out of the budget deficit being a few billion dollars less than last year, but it is still a disgraceful almost $2 trillion.
