Bond Selloff Continues, And Everyone's Freaking Out About A Bad Treasury Auction

The big bond selloff continues today.

30-year bond futures show the carnage.

chart

The big drop you see was a Treasury auction that Rick Santelli graded a “C-” because demand was sloppy.

But why is it seen as a bad thing? We’re not like Ireland, where we actually have to worry about a failed auction. Weak demand for Treasuries isn’t some kind of comment on our solvency. Instead it’s a reflection of risk appetite that’s pushing stocks higher today (albeit modestly so right now).

But then, it’s always bad news with the bond market. One day it’s flight-to-quality, the next day it’s solvency fears. You can spin it however you want.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.

Tagged In

bonds moneygame-us