Non-Competitive Bids in November 2025: Liquidity Risk and Yield Assessment

Non-competitive bidding provides a straightforward way for non-institutional investors to buy U.S. Treasury securities by accepting the yield set by competitive auctions. Institutional buyers participate in auctions by bidding on yields to determine the final rate, and non-competitive bidders simply agree to receive the securities at that rate. Treasury Direct offers a user-friendly platform for individuals, with minimum purchases of $10,000 and maximums of $500,000 per auction. However, the broader non-competitive bidding limit is $5.0 million per auction for investors, and non-competitive bids are typically submitted before competitive offers are accepted.

In November 2025, the Treasury Department conducted significant auctions, selling $694 billion in securities overall, including 10-year notes at a 4.07% yield. This issuance contributed to federal debt reaching $38.16 trillion and pushed 10-year yields to 4.15% amid the large auction activity. Specifically, for the 10-year notes auction, non-competitive bids totaled $143.0 million, representing a small fraction of the total issuance.

The latest U.S. Treasury auction tells a compelling story about who's buying government debt and why yields moved sharply lower afterward. On May 6th, the auction for 10-year notes saw investors accept the yield, with non-competing bids allowing participants to take the price set by competitive bidders rather than bidding directly. The standout detail: over 71% of the buying came through indirect channels, primarily foreign governments and central banks.

This heavy indirect participation, combined with direct bids from entities like domestic money managers at 20%, resulted in a robust 2.6 times bid-to-cover ratio. That level of demand is significant; a ratio above 2.5x is generally seen as healthy and often pushes yields lower as buyers compete less aggressively. Indeed, yields dropped by roughly 3-5 basis points immediately post-auction, signaling strong appetite and bolstering investor confidence in U.S. debt despite broader market uncertainties. This dynamic underscores how the structure of demand – who's buying and through what mechanism – directly influences the cost of borrowing for the U.S. government and, by extension, for households and businesses relying on those rates.

The Treasury market, the bedrock of global finance, faces growing strains from unexpected sources. Behind the scenes, banks acting as market makers are grappling with regulatory constraints that threaten to undermine liquidity – the lifeblood that keeps borrowing costs stable and financial systems running smoothly. A recent Federal Reserve study highlights how banks' supplementary leverage ratio (SLR) rules, designed as a safety net after the 2008 crisis, can ironically create friction in vital government bond markets. During the 2020 pandemic, a temporary easing of SLR requirements for Treasury holdings proved surprisingly effective, boosting dealer balance sheets and significantly calming market volatility. Now, as those emergency measures expire and SLR pressures return, the potential for tighter dealer capacity looms large. Compounding this risk, November's 10-year note auction saw a notable $143 million in non-competitive bids – purchases made at the final auction rate by smaller investors – signaling a shift in demand dynamics that dealers must navigate under tighter regulatory umbrellas. This combination of regulatory headwinds and changing investor behavior raises fresh questions about the Treasury market's resilience and its ability to absorb large trades without sharp price swings or higher yields for taxpayers.