US Treasury Auctions $67 Billion in Notes and Bonds as 10-Year Yield Climbs Above 4.3 Percent

Global bond markets recorded net outflows exceeding $12 billion last week as investors repriced duration risk across sovereign curves. US debt held by the public reached $28.1 trillion in September, with net interest payments now projected by the Congressional Budget Office to exceed $1 trillion annually by 2026. Primary dealers reduced net positions in Treasuries by $18 billion in the prior reporting period, shifting inventory risk onto foreign official accounts.

Japan’s Ministry of Finance reported a 4.2 percent decline in US Treasury holdings through August, while China’s SAFE data showed continued net sales of $22 billion over the same interval. These reductions coincide with domestic yield rises in both Tokyo and Beijing that improve the relative return on local-currency debt. The incentive structure favors shorter-maturity or inflation-linked instruments over long US paper when fiscal trajectories remain unchanged.

Wednesday’s auctions will test clearing levels for the 10-year at 4.35 percent and the 30-year near 4.55 percent. Failure to attract sufficient non-dealer bids would require either higher coupons or accelerated Federal Reserve balance-sheet runoff, both of which tighten financial conditions for deficit-financed spending. Treasury issuance calendars through year-end already schedule an additional $1.8 trillion in gross supply.