In secondary-market trading on Monday, the yield on most U.S. Treasury securities moved about, though with a slight edge upward. Yields for three securities dropped:
- 2-Year note dropped from 4.48 to 4.45;
- 3-Year note dropped from 4.47 to 4.45; and
- 5-Year note dropped from 4.25 to 4.24.
Three securities stood unchanged from Friday:
- 1-Month bill at 3.3 percent;
- 1-Year bill at 4.5 percent; and
- 7-Year at 4.15 percent.
The remaining maturities delivered higher yield on Monday:
- 2-Month bill rose from 3.61 to 3.66 percent;
- 3-Month bill rose from 3.81 to 3.97;
- 6-Month bill rose from 4.31 to 4.38;
- 20-Year bond rose from 4/26 to 4/29; and
- 30-Year bond rose from 3.99 to 4.04.
With the 30-Year bond now above four percent, only the 1- and 2-month bills pay less than that.
A comparison between secondary-market yields and median yields from the latest Treasury auctions indicates that the Treasury will have to pay more in coming weeks in order to retain its investors. The biggest market-to-auction difference is in the 1-year note, which pays 4.5 percent in the market but only yielded 3.895 percent at its October 4 auction. This is a 15-percent advantage for the secondary market.
The lowest market-to-auction difference is in the 1-month bill, where the market pays $1.034 in yield for every $1 in yield paid out on auction-sold bills.
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