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The Bond Market Is Waking Up to the Fiscal Mess in Washington

The Bond Market Is Waking Up to the Fiscal Mess in Washington

Treasury auctions are like the plumbing of a toilet: You only pay attention when something goes wrong. A weak auction drove a market selloff on Wednesday for the first time since late 2023. There are good reasons to be concerned about overspill.
The auction itself should have been uneventful. It involved some $16 billion of 20-year bonds sold to investors—no big deal. But there was less demand from end-investors than usual, and the price was lower—so the government's borrowing cost higher—than had been expected in advance.

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