Treasury's $100 Billion of Bond Sales Overwhelms Debt-Saturated Investors

Bloomberg reports:

Treasury yields may rise in coming weeks as the U.S. government overwhelms investors with $100 billion of debt sales.

The Treasury plans to borrow $171 billion between January and March to pay for rebuilding after Hurricanes Katrina, Rita and Wilma, $27 billion more than in last year's first quarter. Banc of America Securities LLC analysts forecast about 60 percent of the sales will take place by Feb. 9.

A JPMorgan Chase & Co. survey on Jan. 9 showed investors in the $4 trillion Treasury market are the most bearish on government debt since September. The Treasury's auction of $13 billion of five-year notes on Jan. 11 drew the least demand since April. Companies added to the strain with a record $37.9 billion of bond sales last week.

``I don't want to get overly bearish,'' Ted Ake, co-head of U.S. Treasury trading at Mizuho Securities USA Inc. in New York, said Jan. 12. ``But we're getting a ton of supply, and not just Treasuries.''

What will the return of the 30 year Treasury bond do to the yield curve? Either way it looks like rates will go higher.