At the 13-week bill auction on Monday, the Treasury sold $60.9 billion worth of debt, up from last week's $60.3 billion but lower than all ten previous auctions. This one attracted $144.9 billion in tender offers, the lowest in eight weeks. The tender-to-accept ratio came out to 2.38, a seven-week low.
At the 26-week auction, investors offered $136.1 billion for $50.7 billion in accepted debt sales. This came out to a T/A well in line with three of the four previous auctions.
The yields at these auctions were minor increases over previous auctions. For the 13-week, the yield rose to 4.22 percent from 4.11 two weeks ago and 4.16 last week. The 26-week auction increased the yield by a microscopic 0.01 percentage point, from 4.49 last week to 4.5 this week.
Both auctions added to the cost of the federal debt:
- The 13-week added an annualized $843 million over the maturing batch of bills;
- The 26-week added an annualized $1.522 billion over the maturing batch.
In both cases, the increases were approximately no size with last week's annualized debt-cost hikes.
There is a trend of falling tender-accept ratios for the total U.S. debt. As of Monday, the weighted-average T/A stands at 2.232, compared to 2.449 a month ago. A declining T/A ratio indicates that the Treasury is seeing less liquidity in the auction market for its securities.
Today's auctions nudged the estimated, average interest cost on U.S. debt from last week's 2.10 percent to 2.11 percent.
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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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