Believe it or not, there were debt auctions this week, as the US has to fund its never-ending spending splurge. On Monday, a somewhat mediocre two-year note auction occurred. Another $69 billion of debt was sold, high interest rate of 3.5%, up very slightly from last month and a little higher than expected. Demand was subdued, especially from foreign buyers. This is concerning because demand had been holding up well on the short end. In the after-market, interest rates on US debt rose.
Then on Tuesday, $70 billion in five-year notes was auctioned. Again, note the incredible amounts of debt sold every week, and I don’t even report on the massive issuance of very short-term bills. A bad auction. High interest rate of 3.75%, up substantially from the prior similar auction and higher than expected. Low overall demand and very low foreign demand, compensated for by more domestic buyers.
One of the last auctions of the year occurred on Wednesday, seven-year notes, $44 billion in face value, auctioned at a high interest rate of 3.93%. While the interest rate was up from last month, it was a little lower than expected. Demand overall was in-line with recent similar auctions and foreign interest was better than in the week’s earlier auctions. So a bit of a Christmas present to close out 2025’s auctions, as this was definitely better than the week started out.
