US 2-Year Note Bid-to-Cover Actual 2.580 (Previous 2.570)

US 2-Year Note Bid-to-Cover Actual 2.580 (Previous 2.570)

The U.S. 2-year note bid-to-cover ratio rose to 2.580 on June 19, 2025, from the previous 2.570, reflecting increased investor demand for the note [NUMBER:1]. This uptick comes amidst a backdrop of volatile market conditions and shifting interest rate expectations.

In May and June, 10-year Treasury bond yields remained range-bound despite a volatile policy backdrop. The yields mostly ranged between 4.2% and 4.6%, indicating a stable but cautious market sentiment [NUMBER:1]. The Federal Open Market Committee (FOMC) chose to maintain the short-term federal funds target rate in the 4.25% to 4.50% range at its June meeting, which aligns with market expectations [NUMBER:1].

The rising bid-to-cover ratio for the 2-year note suggests that investors are positioning for potential yield increases. This is in line with expectations that the Federal Reserve may continue to hold rates steady or even consider further rate cuts later this year [NUMBER:1]. Additionally, the upcoming congressional debate over the debt ceiling and potential tax cuts could influence Treasury yields, potentially driving them higher [NUMBER:2].

Investors are advised to maintain a balanced approach to their fixed income portfolios, considering opportunities in more complex credits and structured bonds. As the yield curve remains relatively flat, investors should be mindful of interest rate risk and the potential for bond prices to fall as yields rise [NUMBER:1].

For more insights and guidance, consult with a wealth professional to align your fixed income investments with your financial goals, risk tolerance, and investment time horizon.

References:
[1] https://www.usbank.com/investing/financial-perspectives/market-news/interest-rates-affect-bonds.html
[2] https://www.troweprice.com/en/ee/insights/the-calm-before-the-storm-the-outlook-for-treasury-yields