Some Thoughts on the 5.42% Yield at the 20-Year Treasury Auction: Bond Market Bloodbath Continues
The function of yield is to create demand. And it did.
Source: Wolf Street
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DW NOTE
The 20-year hit 5.42% because the Treasury needed to find buyers for $16 billion in new paper while the government runs a $1.4 trillion deficit and the Fed holds rates at 3.75%. Markets cleared because yield did what it exists to do — compensate investors for risk they would otherwise refuse. This is not bloodbath, it is price discovery in the presence of supply.