High Long-Term Bond Rates May Prompt U.S. Treasury to Adjust Issuance Duration to Ease Market Pressure

In October's two long-term bond auctions, the U.S. Treasury fully utilized $6 billion in repurchase limits twice but still struggled to curb rising yields on the long end. After the 30-year Treasury yield broke through 5.6%, the Treasury plans to scale back auctions for bonds with maturities over 10 years and direct new financing more toward short-term Treasury bills. Multiple research institutions believe that if AI investment and corporate financing demands do not substantially cool down, supply-demand pressures on long-term bond funding will remain significant, making high long-term bond rates a potential new normal. Currently, U.S. AI infrastructure investment is surging; Nvidia's latest 10-Q report filed with the U.S. Securities and Exchange Commission (SEC) shows its off-balance-sheet guarantees increased by over 180% in a single quarter. (Securities Times)