US Treasury's 30-year debt sale meets good demand

NEW YORK, Sept 11 (Reuters) - A U.S. Treasury's sale of $22 billion in 30-year bonds on Thursday was well received, despite lingering concerns in the market over U.S. fiscal health and widening debt levels.

The 30-year bonds were sold with a high yield of 4.651%, about 0.1 basis points below the market at the bidding deadline, LSEG data showed, a sign investors were willing to pay up, though only slightly, to absorb the issuance.

Bond investors were closely watching the Treasury auction to get a measure of demand for U.S. government debt, as many in the market worry the U.S. government keeps over-spending while not doing enough to refill its coffers.

Long-dated U.S. debt, in particular, has received much scrutiny this year, with 30-year yields remaining elevated despite expectations of imminent interest rate cuts. Several times this year those yields breached 5%, a level some see as impacting broader financial markets. Yields rise when bond prices fall.

An underwhelming 30-year auction last month had some of the weakest demand metrics of 2025, with the bid-to-cover ratio, a measure of investor demand, at 2.27, the lowest level since November 2023. That ratio stood at 2.38 on Thursday with primary dealers taking 10% of the issuance.

"There was plenty of demand for this paper and the primary dealers were not needed to pick up the slack," Lou Brien, strategist at DRW Trading in Chicago, said in a note.

The 30-year yield US30YT=RR has declined by over 30 basis points since September 3, when it briefly topped 5% for the first time since mid July, and stood last at 4.659% on Thursday, down by nearly two basis points on the day.

The 30-year sale follows three-year and 10-year Treasury auctions this week that saw solid demand ahead of next week's Federal Reserve rate-setting meeting, which is largely expected to deliver a rate cut.