Trump’s agenda faces a $22 billion test from markets

Standard, boring bond auctions are drawing the attention of investors around the globe.

Standard, boring bond auctions are drawing the attention of investors around the globe. The Treasury Department on Thursday will sell $22 billion worth of 30-year government bonds, in what will serve as a gauge of investors’ appetite for US debt. All eyes are on whether there is weak demand, particularly from foreign investors. The Treasury auction, which is a regularly scheduled event, has become a closely watched barometer for how Wall Street is feeling about the Trump administration’s policy agenda. A poor auction could reignite jitters about America’s debt burden, President Donald Trump’s “One Big, Beautiful Bill Act” and the ability for lawmakers to get the country’s finances in order. If there is weak demand for 30-year bonds at Thursday’s auction, that would push yields higher. Bond yields and prices have an inverse relationship. When there is strong demand for bonds, prices rise and yields fall. Vice versa, when there is weak demand for bonds, prices fall and yields rise. Higher yields would squeeze the government with higher borrowing costs. Treasury yields are also benchmark interest rates for the economy, and higher yields can mean higher borrowing costs for consumers on everyday items including auto loans and credit cards. Long-term US debt, which is usually considered the safe, risk-free corner of the market, has come under scrutiny as Trump’s tax bill is set to add to the federal debt burden.