U.S. 5-Year Treasury Auction (May 28, 2025): Demand Remains Strong at 3.995% Yield

U.S. 5-Year Treasury Auctio

U.S. 5-Year Treasury Auction on May 28, 2025: Solid Demand with a 3.995% Yield

On May 28, 2025, the U.S. Treasury auctioned $70 billion in 5-year notes. The high yield was set at 3.995%, in line with market expectations. The bid-to-cover ratio came in at 2.47, indicating solid investor appetite.

Indirect bidders which include foreign central banks and international institutions accounted for 64.04% of accepted bids, while direct bidders took 24.8%. The strong participation from overseas reflects continued global demand for U.S. government debt amid macroeconomic uncertainty.

This auction result suggests that despite ongoing concerns about inflation and Federal Reserve policy, investors remain confident in U.S. Treasuries as a safe and stable asset. The steady demand also reinforces the credibility of U.S. debt markets ahead of upcoming longer-duration auctions.

Terms You Should Know

High Yield: The highest yield accepted during the auction, which becomes the uniform rate for all successful bidders.

Bid-to-Cover Ratio: A measure of demand, calculated by dividing the total amount of bids by the amount of securities sold.

Indirect Bidders: Typically foreign central banks and international financial institutions placing bids through intermediaries.

Direct Bidders: Domestic institutions placing bids directly with the U.S. Treasury.

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