The U.S. Treasury will auction $183 billion of new notes across three days this week, selling $69 billion of two-year notes on Tuesday, August 25, $70 billion of five-year notes on Wednesday, August 26, and $44 billion of seven-year notes on Thursday, August 27. Treasury announced all three offerings on August 20 and all three settle on Monday, August 31. The supply lands in the same week that the Bureau of Economic Analysis publishes the July personal consumption expenditures price index and Federal Reserve Chair Kevin Warsh delivers his first Jackson Hole keynote as chair. Those three events, roughly $183 billion of coupon issuance, the Fed’s preferred inflation gauge, and a speech from a chair who has stopped telegraphing policy, all arrive before the Federal Open Market Committee meets again on September 15 and 16. The prime rate stands at 6.75% and will not move until the Committee moves its target range, currently 3.50% to 3.75%. What can move this week is the long end of the curve, where the 30-year Treasury yield closed at 5.23% on August 20 and the national debt settled at $40.03 trillion. Borrowers watching mortgage and auto pricing should watch the auction tails, not the prime rate.
Key Takeaways
- Treasury sells $69 billion of 2-year, $70 billion of 5-year and $44 billion of 7-year notes on August 25, 26 and 27.
- All three offerings were announced August 20 and settle together on Monday, August 31.
- July PCE prints Wednesday at 8:30 a.m. EDT, the last major inflation read before the September FOMC meeting.
- Chair Warsh gives his first Jackson Hole keynote Friday, August 28, at a symposium running August 27 to 29.
- The prime rate holds at 6.75%. Long yields, not the prime rate, are what this week can actually move.
What Treasury Announced
Treasury published three auction announcements on August 20 covering the last coupon block of the month. The two-year note, CUSIP 91282CRH6, carries a $69 billion offering and auctions Tuesday, August 25. The five-year note, CUSIP 91282CRK9, carries a $70 billion offering and auctions Wednesday, August 26. The seven-year note, CUSIP 91282CRJ2, carries a $44 billion offering and auctions Thursday, August 27. Every one of the three is a new issue rather than a reopening, and all three settle on Monday, August 31. The sizes are notable for what they are not. Treasury has held the two-year at $69 billion, the five-year at $70 billion and the seven-year at $44 billion at every monthly auction since January, so this week’s slate is a continuation of the schedule rather than an increase in it.
The coupon auctions sit inside a heavier week of total issuance. Treasury also sells $92 billion of 13-week bills and $79 billion of 26-week bills on Monday, $95 billion of 6-week bills on Tuesday, and reopens a two-year floating rate note for $28 billion on Wednesday. Bills dominate the gross number, but they roll over constantly and reprice with the fed funds target. The coupon auctions are different. They lock in a fixed rate for two, five and seven years and add directly to the fixed-rate carry on a debt stock that closed at $40,033,256,786,764.37 on August 20, according to Treasury’s Debt to the Penny series. That figure has stayed above $40 trillion since the first close above the line on August 18.
The Week Ahead, Day by Day
Monday, August 24, opens with the routine 13-week and 26-week bill auctions. Tuesday, August 25, brings the $69 billion two-year note, whose competitive bidding closes at 1:00 p.m. EDT. It is the shortest coupon on the calendar and the one most tightly bound to what traders expect the Fed to do at the September meeting. Wednesday, August 26, is the crowded day. The Bureau of Economic Analysis releases Personal Income and Outlays for July at 8:30 a.m. EDT, which carries the PCE price index that the Committee names as its preferred inflation measure, and Treasury sells the $70 billion five-year note four and a half hours later. Thursday, August 27, brings the $44 billion seven-year note and the opening of the Kansas City Fed’s Jackson Hole symposium.
Friday, August 28, is Warsh’s turn. The Kansas City Fed has set the 2026 symposium for August 27 to 29 under the theme “Financial Innovation: Implications for Payments and Policy,” and Friday morning is the traditional slot for the chair’s remarks. Warsh took office on May 22 and has not used the pre-meeting period to signal intent the way his predecessors did, which raises the information value of anything he says on the record. The next FOMC meeting runs September 15 and 16 and carries a fresh Summary of Economic Projections.
Why the Long End Carries the Risk
The Fed’s H.15 release put the two-year Treasury at 4.19% on August 20, the five-year at 4.39%, the ten-year at 4.69% and the 30-year at 5.23%. The spread between the ten-year and the two-year finished August 21 at 0.50 percentage points, up from 0.44 on August 6. The front of the curve is pinned. Effective fed funds printed 3.63% on August 20 and SOFR printed 3.63% on $2.922 trillion of volume, both sitting inside the 3.50% to 3.75% target range the Committee voted 9 to 3 to keep on July 29. Beth Hammack, Neel Kashkari and Lorie Logan dissented, each preferring a quarter-point increase. The movement has been at the far end, where the 30-year touched 5.31% on August 17.
July’s results set the benchmark. The two-year cleared at 4.315% with a 2.66 bid-to-cover on July 27, the five-year at 4.408% with 2.28 cover the same day, and the seven-year at 4.473% with 2.49 cover on July 28. On current secondary levels the two-year should clear below its July stop while the seven-year clears near it, a split that tells you where the market has repriced. The refinancing math matters more than any single tail. Treasury’s own accounting puts the average interest rate on outstanding notes at 3.309% as of July 31, against total interest-bearing debt at 3.447%. Every note sold near 4.2% to 4.5% replaces maturing paper issued far cheaper. Notes alone accrued $410.5 billion of interest in the first ten months of fiscal 2026.
What This Means for Your Rates
Nothing this week changes the prime rate. Prime tracks the top of the fed funds target range plus three percentage points, so it holds at 6.75% until the Committee acts, and the first chance for that is September 16. Anything priced off prime, including most variable-rate credit cards, home equity lines and many small business loans, is unchanged through the auctions and through Jackson Hole. What does move is everything priced off the Treasury curve. Thirty-year mortgage pricing follows the ten-year note plus a spread, so the ten-year’s path through Wednesday’s PCE print will show up in mortgage quotes within days rather than months.
Savers are on the other side of the same trade. Two-year and five-year auction stops feed directly into how banks and credit unions price term deposits, which is why CD rates at the two-year and five-year points tend to reset in the days after a heavy coupon week. Money market and high-yield savings yields follow the front end instead and stay tethered to the 3.63% overnight complex. If you are deciding between locking a term and staying liquid, this week hands you fresh pricing on both sides within 72 hours. The rate forecast for the rest of 2026 turns on whether Wednesday’s core PCE reading validates the three dissenters.
If you are shopping a CD this week, get your quote after Thursday’s seven-year auction rather than before Tuesday’s two-year. Banks reprice term deposits off the auction stops, and three auctions in three days give institutions a reason to refresh their boards. The same timing works in reverse for a mortgage lock: if Wednesday’s PCE print comes in hot, the ten-year moves first and your quote follows it up.
Frequently Asked Questions
Are there Treasury auctions this week?
Yes. Treasury auctions $69 billion of two-year notes on Tuesday, August 25, $70 billion of five-year notes on Wednesday, August 26, and $44 billion of seven-year notes on Thursday, August 27, for $183 billion in total. Bill auctions run Monday and Tuesday. All three note auctions settle Monday, August 31.
What are the upcoming Treasury bill auctions?
Treasury sells $92 billion of 13-week bills and $79 billion of 26-week bills on Monday, August 24, and $95 billion of 6-week bills on Tuesday, August 25. All three settle Thursday, August 27. A two-year floating rate note reopening for $28 billion also prices Wednesday, August 26, and settles Friday, August 28. Bill auctions run on a weekly cycle, so the 13-week and 26-week offerings repeat every Monday, while 4-week and 8-week bills price on Thursdays. Treasury publishes each offering size in an announcement several days ahead.
How are Treasury notes doing today?
As of the August 20 H.15 release, the two-year note yielded 4.19%, the five-year 4.39% and the ten-year 4.69%. The 30-year bond yielded 5.23%, down from 5.31% on August 17 but still near the highest levels since 2007. The curve between two years and ten years finished August 21 at 0.50 percentage points, wider than the 0.44 reading two weeks earlier. Short maturities have barely moved because the Fed’s target range has not changed since the July meeting. The repricing has been concentrated in maturities of ten years and longer.
What time do Treasury note auctions close?
In most cases Treasury closes noncompetitive bidding at 12 noon Eastern time and competitive bidding at 1:00 p.m. Eastern, then posts results shortly after the competitive close. Noncompetitive bids are the route an individual investor takes through TreasuryDirect and are capped at $10 million per auction. Competitive bidding requires a bank, broker or dealer. Published results include the high yield, the bid-to-cover ratio and the share awarded to indirect bidders, the standard proxy for foreign and institutional demand at any given auction.
Does a Treasury auction change the prime rate?
No. The prime rate is set by banks at three percentage points above the upper bound of the federal funds target range, so it changes only when the Federal Open Market Committee changes that range. Prime has been 6.75% since the Committee last moved, and the next scheduled opportunity is the September 15 and 16 meeting. Auction results influence Treasury yields, which in turn drive mortgage rates, auto loan pricing and CD yields. They do not touch prime, and they do not touch anything indexed to prime.
Should I lock a rate before the September Fed meeting?
That depends on which side of the balance sheet you are on. Borrowers face a curve where long yields sit near 19-year highs and three FOMC members voted for a hike in July, so waiting carries real risk if Wednesday’s PCE print runs hot. Savers face the mirror image, with two-year and five-year CD pricing likely to firm after this week’s auctions. Locking a mortgage rate protects against a hawkish surprise. Staying short on deposits preserves the option to capture higher yields if the Committee moves in September.
Watching the Week Ahead
Three auctions, one inflation print and one keynote will tell markets more about September than the past three weeks did. Watch Wednesday’s core PCE reading first, the five-year and seven-year tails second, and Warsh’s language on Friday third. The prime rate stays at 6.75% either way. Track the national debt and the rate environment for the numbers as they land.
References
- TreasuryDirect. Auction Announcements, Data and Results. Offering sizes, CUSIPs and auction dates for August 24 to 28, 2026.
- U.S. Treasury Fiscal Data. Debt to the Penny. Total public debt outstanding, August 20, 2026.
- U.S. Treasury Fiscal Data. Average Interest Rates on U.S. Treasury Securities. July 31, 2026.
- Federal Reserve Board. FOMC Statement, July 29, 2026. Target range and 9 to 3 vote.
- Federal Reserve Board. H.15 Selected Interest Rates. Yields as of August 20 and 21, 2026.
- Federal Reserve Board. FOMC Meeting Calendars. September 15 and 16, 2026 meeting.
- Bureau of Economic Analysis. Release Schedule. Personal Income and Outlays, July 2026, August 26.
- Federal Reserve Bank of Kansas City. Jackson Hole Economic Symposium. August 27 to 29, 2026.
- Federal Reserve Bank of New York. Reference Rates. SOFR and EFFR, August 20, 2026.
- TreasuryDirect. FAQs about Auctions. Bidding close times and noncompetitive bid limits.
- Federal Reserve Board. Kevin Warsh takes oath of office as chairman. May 22, 2026.
