US six-month bills bid/cover ratio 2.70 vs. 3.36 previous auction

US six-month bills bid/cover ratio 2.70 vs. 3.36 previous auction

The U.S. Treasury's auction of $85 billion in six-month bills, held on August 25, 2025, demonstrated a significant increase in the bid-to-cover ratio compared to the previous auction. The bid-to-cover ratio, which measures the demand for these bills, climbed to 3.36, up from 2.70 in the previous auction [1].

The auction saw a high rate of 4.245%, with 29.69% of bids awarded at that rate. The total accepted bids reached $73.00 billion, with a total of $245.56 billion in public bids tendered. The competitive bids accepted totaled $71.13 billion, while noncompetitive bids and Federal Reserve add-ons accounted for the remainder [2].

This increase in the bid-to-cover ratio indicates a strong demand for short-term U.S. Treasury bills, which are considered a safe haven asset. The higher demand suggests that investors are seeking to secure their funds in short-term, low-risk investments.

The auction results also reflect the current interest rate environment, where the Federal Reserve has been raising interest rates to combat inflation. The higher yields on these bills are a response to the increasing interest rates, making them more attractive to investors.

In summary, the U.S. Treasury's auction of six-month bills on August 25, 2025, demonstrated a robust demand for short-term, low-risk investments, as indicated by the rise in the bid-to-cover ratio.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_S0N3TE03M:0-us-sells-85-bln-6-week-bills-at-high-rate-of-4-245/
[2] https://www.tradingview.com/news/reuters.com,2025-08-25:newsml_AQN2KTEVN:0-u-s-6-month-bills-high-rate-3-915/