US 2-Year Treasury Auction Cools Ahead of Fed Decision as Overseas Demand Slumps

Ahead of the Federal Reserve's FOMC decision, the US $69 billion 2-year Treasury auction saw weak demand, with a high yield of 4.708%, down slightly from 4.787% last month and 0.3 basis points higher than the pre-auction when-issued yield, marking the largest tail since March. The bid-to-cover ratio was 2.589, the lowest since March; indirect bids from overseas investors accounted for only 45.7%, down sharply from 57.8% in September and the lowest since November 2021. Direct bids rose to 41.3%, a record high, while dealer takedown was 13.0%, roughly in line with recent levels.