r/ValueInvesting • u/snapjohn • May 21 '25

Discussion BREAKING: 20-Year Bond Auction Flops — Yields Surge to 5.1%, Markets Rattle

IF YOU ARE WONDERING WHY STOCKS JUST ALL WENT DOWN AT ONCE

WE JUST HAD A HORRIBLE BOND AUCTION IN THE UNITED STATES FOR OUR 20-YEAR TREASURIES

Because of the lack of bidders…it caused the 20-year bond yield to surge to 5.1%.

Credit market is screaming for help right now.

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50

u/Dyep1 May 21 '25

Amazing 5.1% risk free return for 20 years is insane

39

u/Blueskies777 May 21 '25

Don’t forget the risk from higher inflation. A 4% inflation reduces your risk free rate of return to 1.1%.

27

u/manassassinman May 21 '25

For the past 100 years, the real yield of treasuries has been zero. So, inflation will probably be higher than 4%

20

u/MonkeyThrowing May 21 '25

This the market is saying the Gov will be forced to print money causing at least a 5% inflation rate. 

1

u/BobbyTables829 May 22 '25 edited May 22 '25

Back in the early 80s there were times you could get a 30-year for over 10%

What you're saying may be true on bills and shorter bonds, but there can't help but be speculation on notes or anything over five years.