Rates have been creeping up at the long end since the Fed cut 50 bps and the market priced out some risk of recession. The belly of the curve though has been caught in between that and lower short-term rates and only ticket up slightly from the cycle low of 3.37% on September 11.
- Lowest yield in over a year
- Prior sale was 3.645% in August
- Prior to this sale the score this year was 6 auctions tailing, 2 stopping through
- Bid to cover 2.38 vs 2.41 prior
That's a good auction: Right on the screws. There was a half-basis point concession in the run up to the election and 5s have been soft since Europe opened but it's a pretty strong endorsement of keeping 5s around 3.50%, which is where the Fed is heading.
