20-year US Treasury auction yield hits record high as 10-year yield reaches 20-year peak

The US Treasury auctioned $13 billion in 20-year bonds at a yield of 5.420%, marking a record high for this maturity. While the bid-to-cover ratio of 2.57 was slightly higher than the previous auction, the significant rise in yield and a decline in indirect bidder participation indicate that investors require higher risk compensation. Meanwhile, the 10-year US Treasury yield touched its highest level since 2007, driven by concerns over inflation, energy prices, fiscal financing needs, and Federal Reserve interest rate policy. JPMorgan client surveys show a sharp increase in short positions, reaching the lowest net long level in four months, as rising long-term yields continue to pressure financing costs and risk assets.