Investing.com -- The US government solid a record $67 billion of 5-year notes on Tuesday at a lower-than-expected yield as demand for shorter duration bonds remain solid amid expectations for a sooner rather than later Federal Reserve rate cut.
The notes were awarded at 1.235%, just below the pre-sale, or when-issue, rate of 4.245%, and below the 4.32% high seen in the prior auction, signaling ongoing investor appetite for the belly of the yield curve, which typically reflects rates maturing between 10 and two years.
The bid to cover ratio, a measure demand, for the auction was 2.41, unchanged from the prior auction.
The yield on the 5-Year traded at 4.228% following the news, down from the day's high of 4.262%.