The United States Treasury sold quite a bit of debt this week and here is the round up of how it went. Quick note: 10 Year Treasuries have been spiking lately suggesting that investors are now demanding the government pay more on their interest on debt. July 2012 it was 1.38%. It now stands at 2.17%.
– On Thursday, $29 Billion was sold in 7 year notes at a yield of 1.496%. This is the highest since March 2012. Almost 40% of the debt was bought up by indirect bidders which include foreign central banks. Another 20% was bought up by direct bidders which is money managers.
– On Wednesday, the Treasury sold $35 Billion in five year notes. Indirect/Direct buyers accounted for 67% of the purchases because interest rate was higher. Bidders got 1.045% which is the highest since October 2011.
-On Tuesday, the government ran into some problems with their 2 year notes. They sold a total of $35 Billion in debt to mostly primary dealers. Indirect/Direct only accounted for 33% of the buying. This was the fewest bids for two year notes since February 2011.
Overall the government sold $99 Billion in debt. Obviously this has to be paid back in 2-7 years with either more tax revenue(which means tax increases) and/or new bond sales. Interest rates appear to be going up by investors wanting more comfort since government has so much debt and with other investments paying higher percentage of return. The government has to play just like everyone else seeking investors to buy their debt.
May “Interest on Debt” payments have not been released yet. But so far in the fiscal year 2013 (which began in October 2012), United States Treasury has paid around $228 Billion on interest on debt. You can track the interest on debt yourself at this site