by Ryan McMaken
Mises.org
The US government is on track to borrow more than two trillion dollars this year, but that’s going to require a lot of new loans from investors, and it’s looking like there is limited investor appetite for ever larger amounts of federal Treasurys. On Wednesday, the auction of 20-year Treasury bonds was so weak that the 20-year yield climbed to over five percent, and long-dated debt yields hit levels not seen since November 2023.
It’s likely no surprise that this tepid demand for new US Treasurys coincides with recent news that Donald Trump’s so-called “big, beautiful” spending bill does nothing to cut overall spending and will only add to the federal deficit—at least $3 trillion more—in coming years.
(Bond yields move opposite bond prices, so rising yields indicate falling demand (and falling prices) for Treasurys.)