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> This has nothing to do with investors' perceptions of U.S. credit and everything to do with the financial rates environment It absolutely is related to inves

> This has nothing to do with investors' perceptions of U.S. credit and everything to do with the financial rates environment It absolutely is related to investors' perceptions of U.S. credit worthiness. The news is about the 13th of August 2026 auction. Entities lending money to US want increasingly higher compensation, which is unsurprising considering that the US projected deficits are ballooning (an estimated 7.4% both in 2026 and 27). US has already blown past 1.8T in deficit in the first 6 months of 2026 alone. That's higher than the deficit for the entirety of 2025. Finding money to absorb all this spending is not easy and lenders are spooked by inflation and borrowing levels.

JumpCrisscross 2mo ago
> It absolutely is related to investors' perceptions of U.S. credit Related to, not evidence of. I added a CDS reference which isolates the credit component. > Entities lending money to US want increasingly higher compensation Entities lending money in dollars want higher compensation. There is no evidence they demand a risk premium from the United States. What we are seeing is an increasing term premium. But that doesn't have to do with the U.S.'s perceived creditworthiness, it's a function of money supply and demand.
- epolanski 2mo ago
  Do you know how bond auctions work? It's based on a price-discovery mechanism. The treasury announces it wants to sell $ 25B of 30Y bonds. Then investors submit offers saying in effect how much yield they demand to buy them. Then the treasury fills bids from the lowest yield upwards in tranches.
  - JumpCrisscross 2mo ago
    > Do you know how bond auctions work? Yes. What do you think I don't understand? Do you understand the difference between credit and rates?
    - epolanski 2mo ago
      I don't think you understand that at bond auctions buyers submit bids essentially setting at which rate they will buy the bonds. Then the treasury fills these orders from the lowest to highest bid. So all of your post make no sense. US paying the highest rates in 25 years means the buyers are expecting higher premiums. And they ask them because they are worried about inflation and elevated borrowing levels.
      - JumpCrisscross 2mo ago
        > Then the treasury fills these orders from the lowest to highest bid No, it does not. Treasury goes down the list until it has allocated the auction and then everyone gets the marginal rate. (And that's for competitive bids. You can also submit a non-competitive bid with no price–that gets filled first.) > US paying the highest rates in 25 years means the buyers are expecting higher premiums Would recommend looking up credit versus rates. It’s a useful construct. > they ask them because they are worried about inflation Nope. Do you know what TIPS are? You can compare the price of a normal Treasury and a TIP to get what Treasury buyers think about inflation. That's the breakeven-inflation rate in my top comment. If you say you think they're wrong, I think I might agree. But the data–Treasury auction and insurance data–speak unambiguously to these points of investors' views, specicially, creditworthineness and inflation expectation.
      - kasey_junk 2mo ago
        > Then the treasury fills these orders from the lowest to highest bid. This is literally exactly wrong. Which is pretty par for the course when someone asks you if you understand how something works in the internet.
- toomuchtodo 2mo ago
  It’s absolutely a risk premium. The market is slowly pricing in no appetite to reduce the US deficit. https://www.atlanticcouncil.org/blogs/econographics/are-rising-bond-yields-and-elevated-leverage-a-recipe-for-market-turmoil/ https://www.atlanticcouncil.org/blogs/econographics/are-risi... > Several factors have driven the rise in bond yields, including higher inflation expectations amid elevated energy prices following the Iran war and uncertainty surrounding a new Federal Reserve Chair. But the more fundamental concern is the US fiscal position: persistently high budget deficits have reached 6 percent of GDP, while government debt now exceeds the size of the US economy. > In Fiscal Year 2026, which ends in September, the US Treasury is expected to issue around $2 trillion of securities on a net basis. Gross issuance, meanwhile, could reach a staggering $20 trillion according to the Securities Industry and Financial Markets Association. That gap reflects the sheer volume of debt that needs to be rolled over, much of it resulting from the Treasury’s decision under former Secretary Janet Yellen to favor shorter maturities when rates were lower and curves were upward sloping. > US Treasury Secretary Scott Bessent has been attentive to the resulting borrowing costs and their impact on the budget deficit, which is why the Treasury has sought to limit pressure on the US bond market from foreign central banks that need dollars. During a recent joint FX market intervention with Japan, the Treasury sold euros for yen rather than dollars, avoiding transactions that would have required selling Treasuries. It has also asked the Fed to raise the limit on its Foreign and International Monetary Authorities repo facility, allowing the Bank of Japan and other foreign central banks to borrow short-term dollars against Treasuries rather than sell them in the open market, which could put further upward pressure on yields. https://www.bloomberg.com/news/articles/2026-08-13/us-braces-for-30-year-bond-auction-at-highest-yield-since-2001 https://www.bloomberg.com/news/articles/2026-08-13/us-braces... > “Investors are being asked to absorb a growing supply of government debt globally at a time when deficits remain large, inflation uncertainty persists” and the Federal Reserve is no longer a major buyer, said Michal Stanczyk, portfolio manager for the global fixed income team at Allspring Global Investments. > “If investors continue demanding greater compensation for inflation and fiscal risks, long-term yields could move higher and away from 5% even if Treasury auctions remain well covered,” he said. Risk premium!
  - JumpCrisscross 2mo ago
    > It’s absolutely a risk premium It's objectively not–that's what CDS measure. > higher inflation expectations Not reflected in the data [1]. We can reasonably debate if investors should treat the U.S. as a riskier credit. But these auctions, CDS data and other funding rates for high-quality non-U.S. dollar-denominated credits (e.g. Saudi Arabia's dollar-denominated debt [2]) do not show what the article implies they do. [1] https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE [2] https://live.deutsche-boerse.com/bond/xs2747599509-saudi-arabien-koenigreich-5-75-24-54?mic=XFRA https://live.deutsche-boerse.com/bond/xs2747599509-saudi-ara...

JumpCrisscross 2mo ago

> It absolutely is related to investors' perceptions of U.S. credit Related to, not evidence of. I added a CDS reference which isolates the credit component. > Entities lending money to US want increasingly higher compensation Entities lending money in dollars want higher compensation. There is no evidence they demand a risk premium from the United States. What we are seeing is an increasing term premium. But that doesn't have to do with the U.S.'s perceived creditworthiness, it's a function of money supply and demand.

epolanski 2mo ago
Do you know how bond auctions work? It's based on a price-discovery mechanism. The treasury announces it wants to sell $ 25B of 30Y bonds. Then investors submit offers saying in effect how much yield they demand to buy them. Then the treasury fills bids from the lowest yield upwards in tranches.
- JumpCrisscross 2mo ago
  > Do you know how bond auctions work? Yes. What do you think I don't understand? Do you understand the difference between credit and rates?
  - epolanski 2mo ago
    I don't think you understand that at bond auctions buyers submit bids essentially setting at which rate they will buy the bonds. Then the treasury fills these orders from the lowest to highest bid. So all of your post make no sense. US paying the highest rates in 25 years means the buyers are expecting higher premiums. And they ask them because they are worried about inflation and elevated borrowing levels.
    - JumpCrisscross 2mo ago
      > Then the treasury fills these orders from the lowest to highest bid No, it does not. Treasury goes down the list until it has allocated the auction and then everyone gets the marginal rate. (And that's for competitive bids. You can also submit a non-competitive bid with no price–that gets filled first.) > US paying the highest rates in 25 years means the buyers are expecting higher premiums Would recommend looking up credit versus rates. It’s a useful construct. > they ask them because they are worried about inflation Nope. Do you know what TIPS are? You can compare the price of a normal Treasury and a TIP to get what Treasury buyers think about inflation. That's the breakeven-inflation rate in my top comment. If you say you think they're wrong, I think I might agree. But the data–Treasury auction and insurance data–speak unambiguously to these points of investors' views, specicially, creditworthineness and inflation expectation.
    - kasey_junk 2mo ago
      > Then the treasury fills these orders from the lowest to highest bid. This is literally exactly wrong. Which is pretty par for the course when someone asks you if you understand how something works in the internet.
toomuchtodo 2mo ago
It’s absolutely a risk premium. The market is slowly pricing in no appetite to reduce the US deficit. https://www.atlanticcouncil.org/blogs/econographics/are-rising-bond-yields-and-elevated-leverage-a-recipe-for-market-turmoil/ https://www.atlanticcouncil.org/blogs/econographics/are-risi... > Several factors have driven the rise in bond yields, including higher inflation expectations amid elevated energy prices following the Iran war and uncertainty surrounding a new Federal Reserve Chair. But the more fundamental concern is the US fiscal position: persistently high budget deficits have reached 6 percent of GDP, while government debt now exceeds the size of the US economy. > In Fiscal Year 2026, which ends in September, the US Treasury is expected to issue around $2 trillion of securities on a net basis. Gross issuance, meanwhile, could reach a staggering $20 trillion according to the Securities Industry and Financial Markets Association. That gap reflects the sheer volume of debt that needs to be rolled over, much of it resulting from the Treasury’s decision under former Secretary Janet Yellen to favor shorter maturities when rates were lower and curves were upward sloping. > US Treasury Secretary Scott Bessent has been attentive to the resulting borrowing costs and their impact on the budget deficit, which is why the Treasury has sought to limit pressure on the US bond market from foreign central banks that need dollars. During a recent joint FX market intervention with Japan, the Treasury sold euros for yen rather than dollars, avoiding transactions that would have required selling Treasuries. It has also asked the Fed to raise the limit on its Foreign and International Monetary Authorities repo facility, allowing the Bank of Japan and other foreign central banks to borrow short-term dollars against Treasuries rather than sell them in the open market, which could put further upward pressure on yields. https://www.bloomberg.com/news/articles/2026-08-13/us-braces-for-30-year-bond-auction-at-highest-yield-since-2001 https://www.bloomberg.com/news/articles/2026-08-13/us-braces... > “Investors are being asked to absorb a growing supply of government debt globally at a time when deficits remain large, inflation uncertainty persists” and the Federal Reserve is no longer a major buyer, said Michal Stanczyk, portfolio manager for the global fixed income team at Allspring Global Investments. > “If investors continue demanding greater compensation for inflation and fiscal risks, long-term yields could move higher and away from 5% even if Treasury auctions remain well covered,” he said. Risk premium!
- JumpCrisscross 2mo ago
  > It’s absolutely a risk premium It's objectively not–that's what CDS measure. > higher inflation expectations Not reflected in the data [1]. We can reasonably debate if investors should treat the U.S. as a riskier credit. But these auctions, CDS data and other funding rates for high-quality non-U.S. dollar-denominated credits (e.g. Saudi Arabia's dollar-denominated debt [2]) do not show what the article implies they do. [1] https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE [2] https://live.deutsche-boerse.com/bond/xs2747599509-saudi-arabien-koenigreich-5-75-24-54?mic=XFRA https://live.deutsche-boerse.com/bond/xs2747599509-saudi-ara...