US Treasury Auctions Show Weak Demand with Highest Yields Since 2025

The recent US Treasury 2-year and 5-year note auctions exhibited the weakest demand in years, with bid-to-cover ratios falling to lows last seen between 2022 and 2024 and yields hitting highs not seen since May 2025. These auction results highlight increased investor caution amid rising US deficit funding, as dealers absorbed a larger share of the supply due to declining direct bidder participation. Market watchers will closely monitor upcoming Treasury auctions and fiscal developments to assess further demand shifts and potential impacts on borrowing costs.