The week’s auctions began on Tuesday with about $58 billion in three-year notes. The high interest rate, at 4.29%, was a little lower than expected (the so-called when-issued rate), but was higher than last month, which was only 4.18%. This continues the very negative trend of rates ticking up somewhat significantly over 2026. Overall demand was good, which I again attribute to the higher interest rate, and foreign buying was also good.
On Wednesday we got a $42 billion ten-year note auction, which drew strong demand and why wouldn’t it, because continuing the trend of recent months the high interest rate was, well, higher than last month, 4.68% versus 4.59%. Not only was overall demand strong but foreign buyers were more than happy to pile in for this rate. Meanwhile, the US is spending way over $1 trillion in interest every year and rising rapidly. The craziness cannot go on.
Thursday closed out the week with a $25 billion 30-year bond note. Yields on this longest-term US debt were already going up, up, up before the auction and sure enough the high interest rate was the biggest in 25 years, at 5.22%, higher than last month and higher than expected. Overall demand was below recent averages as was foreign buying, even with the higher interest rate. Every one of these auctions is increasing the total interest cost of the federal government and raising the deficit and debt pile even bigger.
