The auction of $12 billion worth of 30-year Treasury Bonds was a barnburner today.
Indirect bidders (a group that includes foreign central banks) snapped up a whopping 64.9% of the auction. That was up sharply from an average of 59.9% at recent sales, and within a whisker of the highest since the government started tracking in 2006.
A separate measure of demand called the bid-to-cover ratio climbed to 2.42 from 2.34.
The clamoring for long-term bonds here and abroad is only exacerbating the flattening yield curve problem, which as the Wall Street Journal notes today, is NOT a sign of confidence in the economic growth or inflation outlook. So as I’ve said before – forget about stocks. The REAL action driving this market is in bonds and currencies.
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remember when i said the 10-year rate could go below 1.50% this year? get ready, mike. once everybody piles in, what happens next? what if we see a 1.25% on the 10-year this year? think outside the box on this one. when will they head for the exits?