The 20-year U.S. Treasury bond auction took place today, May 21, 2025, and the results were troubling. Investors showed weak demand, forcing yields higher and triggering a broad selloff in financial markets. The 20-year yield surged to 5.047%, up from 4.810% in the previous auction, signaling growing concerns about the government’s ability to finance its deficits.
The bid-to-cover ratio fell to 2.46, down from 2.63 in the last auction, marking one of the weakest showings in months. This decline suggests investors are demanding higher returns to hold U.S. debt, reflecting uncertainty about inflation, interest rates, and fiscal policy.
IF YOU ARE WONDERING WHY STOCKS JUST ALL WENT DOWN AT ONCE
WE JUST HAD A HORRIBLE BOND AUCTION IN THE UNITED STATES FOR OUR 20-YEAR TREASURIES
Because of the lack of bidders…it caused the 20-year bond yield to surge to 5.1%.
Credit market is screaming for help right now. pic.twitter.com/ne14v5PaVm
— amit (@amitisinvesting) May 21, 2025
Big spike higher in 20-year Treasury yields after that tailed auction. Not great to see.
For those in the back, yes yields matter. Anyone saying otherwise should be ignored or ridiculed. 😂 pic.twitter.com/eZAroA7tAf
— Markets & Mayhem (@Mayhem4Markets) May 21, 2025
There it is:
The market is finally starting to react to the surge in treasury yields.
Can this market survive with a 5% 10Y Yield? pic.twitter.com/SsbIDskTam
— The Kobeissi Letter (@KobeissiLetter) May 21, 2025
BREAKING: The 10Y Note Yield officially rises to 4.60%.
That’s +90 basis points since the “Fed pivot” began.
Again, the Fed has cut rates by 75 basis points, but yields are soaring.
Something is wrong. pic.twitter.com/fJqlMBW8q6
— The Kobeissi Letter (@KobeissiLetter) May 21, 2025
Brilliant triggering a selloff the day before they pass the tax bill, then pump it into the weekend before crashing it again beginning Monday.
— Financelot (@FinanceLancelot) May 21, 2025
I wonder how much higher long-term interest rates have to rise before tech stocks and crypto investors finally take notice. My guess is whatever the breaking point is, we will find out relatively soon, as long-term interest rates will likely keep rising.
— Peter Schiff (@PeterSchiff) May 21, 2025
Market reaction was swift. Treasury yields across different maturities climbed, with the 10-year yield rising to 4.32% and the 30-year yield hitting 4.49%. Stocks tumbled as investors reassessed risk exposure. The S&P 500 dropped over 2%, while the Dow lost nearly 600 points, reflecting growing unease over tightening liquidity conditions.
Credit markets are flashing warning signs. Liquidity is drying up, and borrowing costs are rising. Moody’s recent downgrade of the U.S. sovereign credit outlook has only added to concerns, making future auctions even more precarious. Traders are bracing for additional volatility as funding pressures mount.
Sources
https://www.cmegroup.com/education/events/econoday/2025/05/feed645561.html
https://www.tradingkey.com/news/more-news/250713459-us-20-year-treasury-auction-tradingkey-estebanma