Investing.com -- The U.S. government sold $70 billion of 5-year notes on Wednesday at a lower-than-expected yield as demand for shorter duration bonds remain solid amid expectations for a sooner rather than later Federal Reserve rate cut.
The notes were awarded at 4.331%, below the pre-sale, or when-issue, rate of 4.335%, and below the 4.553% high seen in the prior auction, pointing to ongoing strength in demand for belly of the yield curve, which typically reflects rates maturing between 10 and two years.
The bid to cover ratio, a measure demand, for the auction was 2.35, up from 2.30 in the prior auction.
The 5-year Treasury yield traded at 4.327% following the news, down from the day's high of 4.343%.