Treasury Sells 7-Year Notes at 4.512%, the Highest Yield Since December 2024

Treasury sold $44 billion of seven-year notes at 4.512% on August 27, the highest stop for the maturity since December 2024, as indirect bidders pulled back.

Treasury sold $44 billion of seven-year notes at 4.512% on August 27, the highest stop for the maturity since December 2024, as indirect bidders pulled back.

Real consumer spending was flat in July as goods outlays fell $49.9 billion and services rose $86.2 billion, with core PCE inflation stuck at 3.3%.

Treasury's average interest rate on all federal debt reached 3.447% on July 31, the highest since June 2009, as low-coupon notes mature into yields above 4%.

Treasury reopened the February 2056 TIPS on August 20, 2026 at a 2.973 percent real yield, the highest at a 30-year inflation-protected auction since October 2001.

The 30-year Treasury yield closed at 5.31% on August 17, the highest since June 2007. Prime held at 6.75% and federal debt neared $40 trillion.

U.S. retail and food services sales fell 0.6 percent in July to $763.6 billion, the largest monthly decline since May 2025, weakening the case for a September Fed rate increase.

Treasury sold $58 billion of three-year notes at a 4.291 percent high yield on August 11, the highest since February 2025, yet demand was the strongest in nine months.

Treasury will auction $125 billion of 3-year, 10-year and 30-year securities on August 11 to 13, holding coupon sizes flat as Q3 borrowing climbs to $739 billion.

U.S. labor costs rose 0.9% in the second quarter of 2026, above forecasts, keeping wage-driven inflation in play as the Fed holds and the prime rate stays at 6.75%.

Interest rate swaps now imply about a 40% chance the Fed hikes on July 29 after Citadel Securities forecast a surprise increase. Here is what a hike or hold means.