US Treasury reports higher yields in recent bill auctions as investors chase duration

The September 8 auctions saw the Treasury issue $92B in 13-week bills and $79B in 26-week bills, a combined $171B in short-term debt. The 13-week bill cleared with a high investment rate around 3.89% to 3.90%, while the 26-week bill came in notably higher, landing between 3.89% and 4.02%. Demand tells two different stories The bid-to-cover ratio, which measures how many dollars of bids came in for every dollar of bills available, diverged meaningfully between the two tenors. For the 13-week bill, the ratio came in at roughly 2.61x. The 26-week bill attracted stronger interest at 2.88x. Roughly 20.33% of bids in the 13-week auction were filled at the highest accepted rate, a figure that actually decreased compared to prior auctions. Meanwhile, the awarded-high percentage for the 26-week bill rose, suggesting the competitive pressure was more intense at that tenor. Secondary market confirms the trend In the secondary market, the 3-month yield sat at about 4.01% as of September 14. The 6-month yield was running around 4.15%. Both figures represent a meaningful pickup from the auction clearing rates. The gap between auction and secondary market yields also suggests that investors who g...