The U.S. Treasury sold $70 billion of five-year notes on September 23, 2026 at a high yield of 5.033%, the highest yield a nominal five-year note auction has carried since June 28, 2006. The security, CUSIP 91282CRN3, priced at 99.855714 and carries a 5% coupon, the first five-year note issued with a coupon that high in twenty years. Treasury announced the sale on September 17 and will settle it on September 30, with the notes maturing September 30, 2031. Demand was thin by every measure the auction statement reports. The bid-to-cover ratio fell to 2.21, the weakest reading since December 2018, and primary dealers were left holding 15.77% of the competitive award, their largest share since May 2024. The result lands one week after the Federal Open Market Committee raised its policy rate and pushed the prime rate to 7%. It also marks a 64 basis point jump from the August five-year sale, the clearest sign yet that the repricing at the front end of the Treasury yield curve is now reaching the belly. Watch today’s seven-year note auction for confirmation.
Key Takeaways
- Treasury sold $70 billion of five-year notes at a 5.033% high yield on September 23, 2026.
- That is the highest five-year auction yield since June 28, 2006, when notes cleared at 5.203%.
- The 5% coupon is the first on a five-year note since 2006.
- Bid-to-cover of 2.21 was the weakest since December 2018; dealers absorbed 15.77%.
- Indirect bidders took 54.31% of the competitive award, the smallest share since March 2020.
Table of Contents
What Happened at the Five-Year Auction
Treasury’s auction statement puts the high yield at 5.033%, the median at 4.950% and the low at 4.870%. Bidders willing to accept the high yield were filled on 30.34% of what they asked for. The 16.3 basis point gap between the high and the low yield, and the 8.3 basis point gap between the high and the median, describe an auction where the last buyers had to be paid well above what the average accepted bidder took. That high-to-median spread is the widest at a five-year sale since September 2022.
The $70 billion offering drew $154.5 billion in competitive bids and Treasury accepted $69.7 billion of them. Adding $322 million of noncompetitive tenders, $9.3 million from foreign official accounts and a $10.5 billion add-on for the Federal Reserve’s System Open Market Account brought total accepted issuance to $80.5 billion. A full-history review of 383 nominal five-year note auctions going back to January 1991 shows only one prior sale in the last two decades cleared higher: June 28, 2006, at 5.203%. Every five-year auction between that date and yesterday priced below 5%, including the sale on July 27 of this year at 4.408% and the August 26 sale at 4.393%.
Where the Demand Went
The bidder breakdown is where the auction looks weakest. Indirect bidders, the category that captures foreign central banks and other buyers bidding through the New York Fed, were awarded $37.8 billion, or 54.31% of the competitive total. That is down from 61.51% at the August sale and is the thinnest indirect participation at a five-year auction since March 25, 2020. Direct bidders, mostly domestic funds and insurers buying for their own accounts, picked up $20.8 billion, or 29.92%, an unusually large share by recent standards. Primary dealers are obliged to bid on the full amount and take whatever no one else wants, so their share is the cleanest read on excess supply. They tendered $85.9 billion and were awarded $11.0 billion, 15.77% of the competitive award. Dealers have not been left with that much five-year paper since May 28, 2024. The bid-to-cover ratio of 2.21, calculated by Treasury as $154.85 billion tendered against $70.0 billion awarded, was the lowest at any five-year sale since December 26, 2018, when it printed 2.09. Taken together, the three measures point the same direction: at 5%, the buyer base that normally clears this tenor did not show up in its usual size, and the balance landed on dealer books.
What a 5% Five-Year Costs Treasury
Treasury is refinancing a debt stock that was built at much lower rates. Total public debt outstanding stood at $40.098 trillion on September 22, 2026, with $32.376 trillion of that held by the public. The average interest rate across all outstanding Treasury notes was 3.345% at the end of August, and the average across all marketable securities was 3.475%. Every note that rolls at 5.033% replaces paper costing roughly 169 basis points less.
The arithmetic compounds quickly at this size. The $70 billion sold yesterday will pay about $3.5 billion a year in coupon interest at a 5% rate, against roughly $2.3 billion had it been issued at the 3.345% average note rate. Treasury runs five-year auctions monthly, and the notes it is replacing were largely sold in 2021, when five-year yields sat near 1%. That maturity wall is why the average rate on the debt keeps grinding higher even in months when the government borrows nothing new. The interest line in the federal budget responds to auction results with a lag measured in years, not days, which is what makes a single 5% print worth reading closely.
What It Means for Your Money
Five-year Treasury yields do not set consumer borrowing rates directly, but they anchor the pricing of products with similar maturities. Auto loans, five-year certificates of deposit and the fixed portion of many home equity products track the belly of the curve more closely than they track overnight policy. When the five-year clears at 5.033%, banks funding a five-year asset face a higher benchmark, and CD rates and high-yield savings yields tend to follow within weeks. The short end works differently. Credit card APRs and most variable-rate personal loans are priced as a margin over the prime rate, which moved to 7% on September 17 after the FOMC raised its target range to 3.75% to 4%. That transmission is mechanical and fast, and it already happened. What yesterday’s auction adds is pressure on the fixed-rate side, where lenders set personal loan rates and mortgage rates off longer Treasury benchmarks. Savers gain first in this setup, borrowers on fixed terms pay more, and anyone carrying a variable balance is already paying the higher number.
Pro Tip
If you hold cash you will not need for three to five years, compare a five-year CD or a Treasury note bought at auction against your current savings yield before the next FOMC meeting on October 27 and 28. Locking a rate near a two-decade high protects you if the Committee reverses course. Keep an emergency buffer in a liquid account, and pay down any variable-rate balance first, since that rate reset the week of September 17 and will not wait for a better auction.
Frequently Asked Questions
What is the current yield on a 5-year Treasury note?
The five-year Treasury note sold at auction on September 23, 2026 carried a high yield of 5.033% and a 5% coupon, the highest auction yield since June 2006. The Federal Reserve’s constant maturity series put the secondary market five-year yield at 4.83% on September 22, the last session before the auction.
How did the U.S. Treasury auction go on September 23, 2026?
Poorly, by the standard demand measures. Treasury awarded the full $70 billion, but the bid-to-cover ratio of 2.21 was the weakest at a five-year sale since December 2018, indirect bidders took only 54.31% of the competitive award against 61.51% a month earlier, and primary dealers were left with 15.77%. The high yield of 5.033% came in 64 basis points above the August auction.
Is it better to buy Treasuries at auction?
Buying at auction through TreasuryDirect means you pay no commission and receive the same price institutions do, since Treasury uses a single-price format where every accepted bidder gets the high yield. Noncompetitive bids up to $10 million are filled in full, so you are guaranteed the security. The tradeoff is timing: you take whatever yield the auction produces on its scheduled date rather than choosing your entry.
How often are 5-year Treasuries auctioned?
Treasury auctions a new or reopened five-year note once a month, typically in the final full week, alongside the two-year and seven-year notes. The September 2026 cycle ran two-year on the 22nd, five-year on the 23rd and seven-year on the 24th. Treasury publishes the full schedule in advance and announces each auction roughly a week before it takes place.
Will my credit card or personal loan rate change because of this auction?
Not because of the auction itself. Credit card APRs and variable personal loan rates are set as a margin over the prime rate, which is tied to the federal funds target and moved to 7% on September 17 after the FOMC raised rates. Auction results affect fixed-rate products instead. If you are shopping a fixed personal loan or an auto loan, the higher five-year benchmark is likely to show up in quotes over the next several weeks.
What does a 5% five-year yield mean for savings and CD rates?
It gives banks a higher benchmark to price against, which usually lifts five-year CD offers and, more slowly, high-yield savings rates. Savings accounts reprice faster because they track short-term rates, while CD yields follow the maturity-matched Treasury more closely. A five-year Treasury at 5.033% means competitive five-year CDs should move toward that level, though banks with ample deposits often lag.
Watching the Next Auctions
Treasury returns to the market today with $44 billion of seven-year notes, and that sale will show whether the thin demand at 5% was specific to the five-year point or is spreading along the curve. The next scheduled read on policy comes at the FOMC meeting on October 27 and 28. Until then, track the prime rate, the shape of the yield curve, and the national debt total as the higher coupons settle onto the books.
References
- U.S. Department of the Treasury, Bureau of the Fiscal Service. “Treasury Auction Results: 5-Year Note, September 23, 2026.” (CUSIP 91282CRN3) https://www.treasurydirect.gov/instit/annceresult/press/preanre/2026/R_20260923_3.pdf
- U.S. Treasury Fiscal Data. “Treasury Securities Auctions Data.” https://fiscaldata.treasury.gov/datasets/treasury-securities-auctions-data/treasury-securities-auctions-data
- U.S. Treasury Fiscal Data. “Debt to the Penny.” Record date September 22, 2026. https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny
- U.S. Treasury Fiscal Data. “Average Interest Rates on U.S. Treasury Securities.” Record date August 31, 2026. https://fiscaldata.treasury.gov/datasets/average-interest-rates-treasury-securities/average-interest-rates-on-u-s-treasury-securities
- Board of Governors of the Federal Reserve System. “Federal Reserve issues FOMC statement.” September 16, 2026. https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm
- Board of Governors of the Federal Reserve System. “Implementation Note issued September 16, 2026.” https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a1.htm
- Federal Reserve Bank of St. Louis, FRED. “Bank Prime Loan Rate (DPRIME).” https://fred.stlouisfed.org/series/DPRIME
- Federal Reserve Bank of St. Louis, FRED. “Market Yield on U.S. Treasury Securities at 5-Year Constant Maturity (DGS5).” https://fred.stlouisfed.org/series/DGS5
- Board of Governors of the Federal Reserve System. “FOMC Meeting calendars and information.” https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
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