Weak auctions for U.S. Treasurys are heightening concerns among investors that the market may struggle to absorb a forthcoming influx of government debt.
A selloff, triggered by an unexpectedly high inflation report, intensified last week due to lackluster demand for a $39 billion 10-year Treasury auction. Similarly, interest in three-year and 30-year Treasury auctions was subdued.
This caution stems from a growing belief that inflation remains unchecked, leading the Federal Reserve to maintain elevated interest rates for an extended period. The 10-year yield, a key indicator for borrowing rates ranging from mortgages to corporate loans, is hovering around 4.6%, close to its peak; which reached 5% last October.
Furthermore, the government plans to auction approximately $386 billion in bonds in May. Wall Street anticipates this trend to persist regardless of the outcome of the upcoming presidential election. While few foresee a failed auction—something analyst ...
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