NEW YORK — The U.S. Treasury sold $58 billion in 3-year notes at a high yield of 4.474 percent, the highest since July 2024, and priced 1 basis point below when-issued levels on consistent domestic end-user demand.
The auction marked the third consecutive 3-year stop-through, with a bid-to-cover ratio of 2.722, nearly flat to August's 2.712. Foreign indirect bidders took 62.15 percent of the offering, slightly below recent averages, while direct bidders—typically domestic institutional investors—secured 26.9 percent, the largest allocation since February. Primary dealers absorbed just 10.91 percent, the second-lowest dealer take in 2026, signaling that end-users rather than dealer flow drove the auction.
The Treasury's concurrent $22 billion sale of 30-year bonds drew the second-highest foreign participation on record, with international buyers acquiring 79.5 percent of the offering. The long bond priced at 5.308 percent—the highest yield since August 2001—and stopped 2.7 basis points through when-issued levels. The bid-to-cover reached 2.612, the strongest reading since February. Primary dealers took just 2.21 percent, a record low, underscoring genuine international institutional demand rather than dealer intermediation.
This marked the fifth consecutive 30-year auction to price above 5 percent yield. The divergent demand pattern—weak dealer participation across both auctions, strong foreign interest in duration, and solid domestic demand in the front end—suggests the Treasury curve is attracting genuine long-duration buyers at elevated yield levels while short-end supply finds ready absorption.
