2PM Deep Dive: Seven-Year Treasuries

The video discusses bearish trends in the US government bond market, focusing on a recent $31 billion auction by the US Treasury. The auction saw lower-than-expected demand, with the lowest bid to cover ratio since March. Direct bidders, such as large institutions and hedge funds, played a significant role. The waning demand suggests pressure on yields to rise, especially during market turmoil. Long-term yields on seven-year treasuries are at their highest since 2011, with expectations of further increases as the US Treasury sells more debt to address the deficit.

What factors are contributing to the rising long-term yields on seven-year treasury bonds?

In what ways might the US Treasury's actions to sell larger amounts of debt affect the market?