U.S. Treasury Bonds Remain Very Popular
On Thursday local time, the U.S. Treasury auctioned $22 billion in 30-year bonds. Overall, the auction was impressive, especially with strong demand from overseas buyers.
This is fundamentally inconsistent with the news and comments we usually read: the winning yield of this 30-year U.S. bond auction was 4.844%, the highest since January this year, compared to 4.819% on May 8. The winning yield of this auction was 1.5 basis points lower than the pre-issue yield of 4.859%, showing no tail spread indicative of weak demand; last month, there was a tail spread of 2.6 basis points. The difference between the winning yield of this auction and the pre-issue yield is also the second largest since November last year.
A continuously increasing debt scale in the treasury certainly means borrowing new debt to pay off old debt. This time, the U.S. equivalent tariffs are intended to increase fiscal revenue. As long as the payment amount is increased, an agreement can be reached; the purpose of negotiations among countries is to strive to pay a little less and see who ends up as the biggest loser with the highest tariffs, probably it is also a master of verbal skills.