U.S. Debt Sale Surprises with Investor Confidence
Wednesday’s U.S. Treasury auction of 10-year notes saw strong investor demand, offering a yield of 4.421% and drawing in more than 2.5 times the amount offered. Despite rising debt concerns, this response challenges the prevailing narrative that global investors are losing interest in U.S. government debt.
Only 9% of the $39 billion issuance was absorbed by primary dealers, the fourth-lowest figure on record — signaling strong real investor interest.
$36 Trillion Debt and the Hedge Debate
Yet, the broader context remains alarming. The U.S. national debt has surpassed $36 trillion, amounting to over 120% of GDP. In 2024 alone, the federal deficit reached $1.8 trillion, and projections show an increase of up to $2.4 trillion in coming years, partly due to upcoming tax cut policies.
Annual interest payments have ballooned to $1 trillion, raising fears of long-term fiscal instability.
Some analysts and institutional investors have begun to explore bitcoin and gold as potential hedges against a worsening fiscal outlook, citing increasing concerns over the sustainability of U.S. government spending.
Eyes on Thursday’s 30-Year Bond Auction
The upcoming 30-year bond sale, scheduled for Thursday, is expected to provide additional insight into investor sentiment. The Treasury plans to auction $22 billion in long-duration bonds. Traders will closely watch the yield and takedown ratios to gauge whether confidence in long-term U.S. fiscal stability is intact.
Any signs of weak demand at the 30-year auction may renew concerns about America’s ability to fund its growing debt without raising yields further.
Bitcoin and Gold: The New Fiscal Safe Havens?
Amid this backdrop, bitcoin surged to $107,835, while gold remains near multi-month highs, as alternative stores of value gain popularity. As traditional assets face increasing pressure from macroeconomic forces, digital and physical hard assets are emerging as strategic hedges in uncertain times.