On Wednesday the Treasury held its third weekly auction for the 4-month (17-week) bill. The auction tendered $104.5 billion and accepted $33.9 billion for a T/A of 3.08. The yield climbed to 4.25 percent, up from last week's 4.15 and 4.1 two weeks ago.
The T/A ratio is markedly higher than the 2.86 and 2.88 from the past two weeks. This likely means nothing in particular, given that the bills under this maturity are new by comparison. There is such a small volume of 4-month bills available in the market, that investor preferences are easily exaggerated in the numbers.
Today's auction had no impact on the average interest rate on the U.S. debt, which according to our model remains at 2.00 percent.
There were only minor movements in market yields, with the biggest change being the yield on the 2-year note rising from 4.54 percent to 4.61 percent. the 20-year bond rose to 4.41 percent from 4.37, and the 4-month bill from 4.35 percent to 4.38.
Market yields for all maturities remain modestly higher than median yields at auctions.
The U.S. Treasury's latest estimate of the federal debt at $31.211.7 billion.
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We do not give investment advice.
This blog provides analytical information solely for the purposes of 1) predicting the cost of the federal debt, and 2) for assessing the risk for a U.S. fiscal crisis. All information published here, forecasting and other, is based on publicly available data from the U.S. Treasury, including but not limited to approximately 65 percent of the current debt; on macroeconomic data, including but not limited to monetary policy decisions by the Federal Reserve; and on macroeconomic theory.
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