20-Year Bond Auction Finds Strong Demand, Soothing Market's Headache

Government debt that expires in 20-years got a strong reception at an auction on Monday afternoon, capping off a series of successful auctions. It may finally put investor concerns about a potential "buyers' strike" at government debt auctions to rest.

The Treasury Department auctioned $13 billion of 20-year notes at 1 p.m. Eastern time. The highest yield, or return, the government had to offer was 4.942%. That was lower than the yields seen prior to the auction. When the government auctions debt at a lower rate, it's considered a good sale since it means the Treasury doesn't have to pay higher interest on its debt.

To be sure, the rate was higher than the 4.680% offered in November 2024 and the average of 4.610% seen in six such auctions, but overall the end-user demand in this auction was clearly solid. Direct bidders bought up 19.9% of the supply versus the typical 18.1%. Indirect bidders, typically considered to be foreign investors, bought 66.7%, which is close to the average of 67.3%.