Treasury Sells 2 Year Paper At Highest Yield Since May 2011

Tyler Durden's picture

Moments ago the Treasury sold $32 billion in 2 year paper. Those who have been keeping track of the amazing bear flattening in rates in the past week will probably not be surprised by the result. Everyone else will surely like to know that it just cost the US the most to sell 2 year paper since May of 2011, which at a high yield of 0.469% was the highest yield since May of 2012, or before the great rotation out of stocks and into bond began. And thanks to the "dots" expect to see the yield on short-dated paper to continue rising, even as the long-end drops further in an epic flattening which is sure to crush bank Net Interest Margins. It also explains why nobody talks about it on CNBC any more: after all what is there to say?

Other notables of today's auction: the Indiect Bid of 40.93% was the highest since November 2012, offset by a tumble in the Dealer Takedown which at 37.53% was the lowest since October of 2012. Perhaps the only good news was that despite the rising yields, or maybe due to, demand at the auction close was solid, with the high yield stopping though the When Issued of 0.477% by about 0.8 bps which was to be expected. If the Fed and Dealers lost control of the front end, it's all over.

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buzzsaw99's picture

qe is dead, long live stealth qe

madbraz's picture

and just like that the NY FED does $94 billion in reverse repos and all that collateral goes to immediate work being rehypothecated and driving the SP500 instantly up some 11 points...


thank god dudley call's its purpose only for "operational readiness".  imagine if it wasn't.

vote_libertarian_party's picture

So if dealer pct dropped is that a sign they are starting to fear they won't be able to flip the bonds to the Fed for an easy profit now that tapering is here?


Just say-in'.

101 years and counting's picture

this is GREAT news.  higher interest expense means more debt to monetize.

Kreditanstalt's picture

The BTFATH-ers and their S&P just achieved ignition this related?

Kreditanstalt's picture

There's no volatility AT ALL.  TOTAL correlation across asset classes.  NEVER a meaningful intraday change of direction. 

These "markets" really ARE "The Truman Show"...truly like being buried alive in Jell-O... 

khildner's picture

Ummm ... the x axis is quite a permutation of dates between year 2008 and now ...

Yancey Ward's picture

Let's take a vote- who thinks the short rate will rise above the 0-.25% range in the next 3 years?  The next 5 years?

PlusTic's picture

It's all bad theater, rates are NEVER going up with unemployment at 13-20% dpending on what source you look at.  It's NEVER gunna happen.  These FED ass-clowns can drive the S&P 500 to 3,000 and it still won;t create any jobs.  The whole thing will fail, as it was intedned to do.  This has all been a wealth extraction experiment.

Son of Loki's picture

I may grab some Treasuries when their yield is back to to a realistic 12%.

Carl Popper's picture

I have seen that. 


You will be too scared of the world around you and too risk averse to pull the trigger if that happens. 

Carl Popper's picture

If China crashes prepare for 40 percent gains in us treasury notes, bills, and bonds across the board.  


And 900 dollar gold. 


Back up the truck, bitchez, if that happens. Follow JPM's lead.