Wednesday, the Treasury auctioned off a new batch of 17-week bills and one under the 20-year bond. The 17-week attracted $104.9 billion in tender offers, of which the Treasury accepted $34 billion. The 3.09 T/A was a drop from last week's 3.14 but almost exactly equal to the 3.08 of two weeks ago.
The 17-week auction produced a median yield of 4.275 percent, up marginally from 4.25 percent in the last two weeks. In yesterday's secondary-market trade, the same Treasury bill sold at 4.4 percent.
A total of $16.6 billion was accepted by the Treasury out of $41.2 billion tendered for this month's 20-year bond auction. The 2.48 T/A is down marginally from 2.5 in October and 2.66 in September.
The big news here is that the yield dropped from last month's 4.319 percent to 4.01. Yesterday, the 20-year sold at 4.2 percent in the secondary market, and 4.28 percent the day before.
We maintain our assessment that bond yields have stabilized in the 4-percent neighborhood, and that they will remain there for the near future.
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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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