Today’s auction of $29 billion in 7-year Treasuries was average, with a bid-to-cover ratio of 2.88, almost exactly the rolling ten average of 2.86.

Of the three auctions this week, there was lots of demand for the 2-year issue, less demand than usual for the 10-year issue, and average demand for the 7-year issue. Investors don’t want to hold longer term debt.

Some analysts think today’s issue was worse than it appears, because it is the last issue of this year, and portfolio managers wanted to get cash off their balance sheet before their investors saw it. Maybe so, but it is clear that the appetite for debt owed by the U.S. is limited. Rates are rising rapidly, making interest carry heavier for taxpayers.

This is a problem that would quickly be corrected by adopting the recommendations of last month’s Deficit Commission!