The US Treasury yields are under scrutiny as they approach pre-COVID levels, with the 10-year Treasury yield at 4.7%. The surge in American government debt and concerns about inflationary pressures have led to a breakout from the secular downtrend. The upcoming monthly 10-year and 30-year Treasury auctions, totaling $108 billion, are anticipated to be significant events, sparking fireworks in the markets. The surge in debt sales has led to a fierce dispute about the extent and causes of problems in the Treasury market, with regulators facing pressure to address the situation cautiously.
A fierce dispute is brewing about the extent and causes of problems in the Treasury market—and the lengths regulators should go to repair them. A radical overhaul of Treasury trading comes with its own risks. Read why https://t.co/CLl7ILRDsc 👇
The U.S. Treasury normally likes its debt sales to be humdrum affairs—but now those sales are sparking fireworks in markets https://t.co/fYd77dQqBf https://t.co/fYd77dQqBf
Our once monthly 10-yr & 30-yr Treas. auctions are next week. Fireworks? "A combined $108B of 3-yr, 10-yr & 30-yr bonds hit the block Mon. & Tues." "The Treasury Dept. issued $824B of T-bills from July to Sept., the majority of its $1.01T borrowing spree." https://t.co/7rbak3EoUN
The Macro environment has drastically changed now 10-year Treasury yield has broken out of its secular downtrend Driven by inflationary pressures since 2022 Higher rates are now the new normal https://t.co/YJJdLffvDt
Only thing that's truly surprising about US Treasury yields is that they aren't higher. US debt issuance is near the height of the 2008 crisis (black) and - on top of that - the Fed is doing pretty aggressive QT (blue). There's some price inelastic buyers out there after all... https://t.co/oD4jx4H5P1
There is no more important financial market than American government debt, and it is growing fast. But when playing with vast sums it is not just the hedge funds buying the Treasury’s debt that can make errors. Regulators must tread with care, too https://t.co/FVD1BGDELD 👇
Before the Fed's unconcenventional policy got going in earnest with QE2 in late 2010, 10y10y forward US yield (pink) cycled in a range from 5.00 - 5.50%. That's the range we're going back to post-COVID, so the long end of the US yield curve is now too low. 10y10y forward is 4.7%. https://t.co/cudTDpuXF4