New 4-Month Treasury Bill

On October 19, the Treasury auctioned off its first package of 4-month, or 17-week Treasury bills. 

Investors tendered $97.8 billion, of which $34 billion was accepted, for a T/A of 2.88. This is currently the highest T/A for any bill; the 4-week most recently earned a T/A of 2.44, with the 8-week at 2.42. The October 17 auction of the 26-week bill produced a T/A of 2.49, while the 1-year landed at 2.51 on October 4.

The new 17-week bill sold at a median yield of 4.1 percent. This slots in between the latest median of 3.75 percent for the 13-week and 4.19 percent for the 26-week. 

On the October 19 secondary market, the par yield for the 17-week (4-month) bill came out at 4.32 percent. All the other maturity classes saw rising yields:

1-month: 3.31, up from yesterday's 3.25; the latest auction yield for the 1-month was 3.19 percent;

2-month: 3.72 (3.70) [3.40];

3-month: 4.07 (4.04) [3.75];

6-month: 4.45 (4.39) [4.19];

1-year: 4.60 (4.50) [3.895];

2-year: 4.55 (4.43) [4.22];

3-year: 4.56 (4.43) [4.24];

5-year: 4.35 (4.21) [4.13];

7-year: 4.26 (4.12) [3.85];

10-year: 4.14 (4.01) [3.85];

20-year: 4.38 (4.27) [4.319]; and

30-year 4.15 (4.04) [3.85].

All other things equal, the differences between auction and market yields on the 7-, 10- and 30-year securities indicate that the Treasury will have to pay well over four percent in November in order to keep the T/A ratios from falling. 

At the September 28 auction, the 7-year note tendered $92.5 billion, with $36 billion accepted (T/A = 2.57). Median yield was 3.85 percent, up from 3.09 percent in August.

On October 12, the 10-year note tendered $74.9 billion, with $32 billion accepted (T/A = 2.34). Median yield of 3.85 percent was up from 3.24 percent in September.

The 30-year bond auction on October 13 tendered $43 billion and accepted $18 billion (T/A = 2.39), with median yield of 3.85 percent being higher than the 3.45 percent from August.