US Treasury sold $723 billion in securities this week amid rising inflation concerns. The government auctioned $483 billion in T-bills across multiple maturities, with rates climbing as inflation data disappointed. The PCE price index jumped to 3.5% versus the Federal Reserve's 2% target, while the GDP deflator surged to 3.6% annually. T-bill yields rose sharply on April 29 and 30 following the Fed's hawkish meeting and inflation releases. The Treasury's General Account peaked at $1.038 trillion from tax receipts but has begun declining. As the account approaches the $900 billion desired level, Treasury will need to increase auction sizes. The combination of higher inflation and potential rate hikes could push the 30-year Treasury yield past 5%, significantly impacting borrowing costs across the economy.
