Huge Demand For 30-Year Treasuries As Operation Twist Begins

Sotheby's Auction Gavel

Photo: AP/John Marshall Mantel

The U.S. Treasury Department sold $13 billion in 30-year bonds at 3.12% this afternoon, setting the lowest yield on record for a bond auction.┬áPrior to the sale, analysts polled by Bloomberg expected bonds to yield a higher rate of 3.16%.The bid-to-cover ratio, the metric used to measure demand in an auction, came in at 2.94, which reflects stronger demand than this week’s 10-year bond auction. It was also stronger than demand during the September and August 30-year auctions.

Primary dealers, per usual, tendered the highest number of bids, but secured only 41.8% of the sale. Indirect bidders, which includes foreign monetary authorities, purchased bonds worth $3.7 billion, or 28.7% of the total block.

As part of its monetary policy, Operation Twist, the Federal Reserve purchased $4.88 billion in long-term Treasuries, helping push down long-term borrowing costs.

The bonds will mature on August 15, 2041.

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