Surreal

The Republicans are advocating a short term technical default, at least a fair portion of them, yet the Treasury has no problem selling its 10 year bonds, even in an environment in which the debt ceiling has been breached and there appears to be no resolution in site.

Today's 10 year auction just came in pretty amazingly strong. The yield was just below 3%, but more impressively, the bid to cover (the total number of bids received compared to those accepted) came in at a ratio of 3.23! Indirect Bidders (foreign governments mostly) took over half of the auction, that hasn't happened in 3 months!

What am I missing here? The US isn't sure it can make the interest payments, the only way it does so now is by dipping into government pensions, the debt ceiling is blown through, there's not apparent progress on a resolution to that problem and Republicans are floating a technical default, yet the 10 years are flying off the shelf?

7-10 year bond fund.