America Averts Bond Auction Armageddon
- Traders get early signal of Treasury’s cost to issue more debt
- Results reinforce it’s not a question of demand, but of price
This article is for subscribers only.
Bond traders can toast to successfully handling a massive wave of debt from the U.S. Treasury, at least for now. With the deluge of supply only just beginning, this week’s auctions served as a reminder that the U.S. won’t have trouble finding buyers for its debt, as long as it pays up.
The Treasury is through selling $229 billion of the $258 billion in bills and notes scheduled for this week, and the auctions have gone largely without a hitch. The biggest takeaway: yields in most offerings had to rise to the highest in eight or more years to attract investors. Strategists say the U.S. can probably expect a similar step-up in borrowing costs moving ahead in 2018.