The Unloved 20-Year Treasury Bond Sells at 5.47%, Highest Auction Yield since… (1986*)
The bond market has come to grips with these 5%-plus yields and settles in.
Source: Wolf Street
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DW NOTE
The 20-year just sold at 5.47%, the highest auction yield in 38 years. Wolf Street says the market has "settled in" to 5%-plus yields. That's one way to describe a forced adjustment: when buyers vanish, yields rise until someone shows up. The Fed raised the interest on reserves to 3.90% last month while running a $1.9 trillion deficit. No mystery why longer-dated paper needs a 157bp premium over the funds rate to clear.