MediumIV Macro Policy & Sovereign Debt22 September 2026, Tuesday · 20:00 TRT (UTC+3)
US Treasury sells $69 billion of 2-year notes at 4.787%: 58.3 basis points above the August auction
At its $69 billion 2-year note auction on 22 September, the US Treasury set the high yield at 4.787%. The bid-to-cover ratio was 2.63; compared with a yield of 4.204% at the August auction, the cost of borrowing rose by 58.3 basis points in one month.
According to TreasuryDirect's results announcement of 22 September 2026, the 2-year note maturing on 30 September 2028 with a 4.75% coupon priced at a high yield of 4.787%, a median of 4.738% and a low of 4.660%. Total bids were $181.26 billion and $69.00 billion was accepted; the bid-to-cover ratio was 2.63. Of competitive acceptances, $39.12 billion went to indirect bidders (57.8%), $19.64 billion to direct bidders (29.0%) and $8.93 billion to primary dealers (13.2%). A further $10.39 billion was rolled over from the Fed's portfolio (SOMA).
According to Helious's auction assessment, the result was in line with the average: the bid-to-cover ratio was just below the 2.60 average, the indirect share just below the 58.6% average, and the tail was 0.2 basis points. In earlier auctions compiled by Crypto Briefing, the yield was 4.204% in August, 4.315% in July and 4.189% in June. With demand unchanged, the 58.3 basis point rise in price in one month shows that the Fed's 16 September hike and the possibility of a further hike have been passed through to the front end. The Treasury will continue this week with 5- and 7-year auctions; the amounts could not be verified for this entry.
Talay assessment
Bottom line
The auction went smoothly in terms of demand; the issue is price, not demand. The same $69 billion that sold at 4.204% a month ago is now selling at 4.787%. This shows that Fed tightening is fully priced at the front end and that the possibility of a further hike has partly entered the curve. The indirect share holding at 57.8% indicates that foreign demand has not pulled back.
Likely effects
- US Treasury interest expenseNegative1–6 months
Rolling near-term debt 58.3 basis points more expensively in a month shows that the front end is where the refinancing burden is rising fastest.
- Global dollar fundingNegativeWeeks
With the 2-year dollar yield at 4.787%, funding costs rise for emerging-market countries and companies borrowing at near-term maturities in dollars.
- Türkiye carry flowsNegativeWeeks
Higher front-end dollar yields narrow the yield differential of carry trades directed at Türkiye, which could put pressure on the currency.
Possibilities, ranked
- 1Demand holds, yields stay high55%
The 5- and 7-year auctions also see near-average demand, and yields remain clearly above August levels.
Watch: Whether the bid-to-cover ratio stays around 2.60 at the 5- and 7-year auctions on 23-24 September
- 2Demand weakens30%
Tails open at the intermediate auctions, the indirect share falls and the term premium rises.
Watch: The indirect share falling clearly below its 58.6% average
- 3Yields retreat15%
Falling oil and weak data reduce expectations of a further hike, and front-end yields decline.
Watch: The October 2-year auction clearing below 4.787%
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- 2-year auction yield▼ 4.787%
- Bid-to-cover ratio▲ 2.63
- Yield change vs August▼ +58.3 bp