The U.S. Treasury will put about $22 billion worth of bonds up for sale on Thursday. Not just any bonds, but 30-year bonds. That’s the longest-maturity bond the U.S. government sells. How that auction goes is going to tell us something about how expensive borrowing will be for the government moving forward, but also for the rest of us.
In other words? “This is a test,” said Mark Cabana, head of U.S. rates strategy with BofA Securities. The auction is a test of investor interest, “to see how well that ultimate demand is looking.”
Thirty years is an awfully long time to lend anybody money, even the U.S. government, because a lot can change in 30 years. And over the past eight months or so, investors have started to worry a little more about that.
“The auction this time around is a little bit more important, because there just have been increasing concerns about the sustainability of U.S. deficits and whether the demand we…
