U.S. Treasury to Auction $16 Billion in 20-Year Bonds at 1 PM Today, Yield Reaches 5.104%

On May 22, the U.S. Treasury auctioned $16 billion in 20-year Treasury bonds at 1 a.m. today. Due to a lack of bidders, the yield on the 20-year Treasury once rose to 5.104%, the highest level since November 2023, with the final announced value at 5.047%. This is the first long-term Treasury auction since last Friday when Moody's became the third and final major rating agency to downgrade the U.S. from its top AAA credit rating.

Brian Quigley, a senior portfolio manager at Vanguard, previously stated that he believes this auction will serve as an important indicator of market demand for long-term U.S. Treasuries. Tom di Galoma, managing director at Mischler Financial Group, mentioned that if yields exceed 5%, it is expected that 20-year and 30-year Treasuries will attract strong demand from life insurance companies as well as state and local pension funds.

The rise in Treasury yields led to a 1% drop in the S&P 500, a 0.6% decline in the Nasdaq, a 1.6% decrease in the Dow, and Bitcoin retraced by about 3.3%.