Yesterday, there was a very successful auction of 2-year Treasuries. Today, there was a barely successful auction of 10-year Treasuries. The bid-to-cover ratio dropped from 3.71 to 2.61. In addition, foreign interest dropped significantly.

The market is saying they don’t want to hold any bonds longer than 2-years because longer-term bonds will lose value due to inflation sometime after 2-years but within 10-years.

Forewarned is forearmed.