U.S. Government 2-Year Treasuries Auction

Investing.com — The U.S. government sold $69 billion of 2-year notes on Tuesday at a lower-than-expected yield, despite declining demand amid speculation that the Federal Reserve may cut rates soon.

The notes were awarded at 3.874%, which is below the pre-sale yield of 3.880% and the 4.434% high from the previous auction.

The bid-to-cover ratio, an indicator of auction demand, fell to 2.68 from 2.81 in the last auction.

Dealers submitted 51.40% of the bids, while direct bidders accounted for 12.65% and indirect bidders for 35.96%, compared to a recent auction where indirect bidders reached 75% due to anticipations of aggressive Fed rate cuts.

Meanwhile, the yield on 2-year U.S. Treasuries decreased by 2 basis points to 3.91%. This successful auction precedes the upcoming 5- and 7-year Treasury auctions this week, which are expected to attract close attention due to recent trends in duration demand.