For people reading the Treasury-bond tea leaves, there are some signals out there that seem to indicate the looming crisis of our debt ceiling and the possibility of default will be short-lived. The Treasury Department's auction of 30-year bonds on Thursday provoked higher-than-average demand, for the third straight sale. It also shows that the market for Treasury bonds is still strong after the end of the Fed's quantitative easing program.
There was some concern, with the debt ceiling issue still up in the air, that investors would be shying away from the United States' long-term debt. Those concerns only increased when Moody's announced it would put the nation's AAA rating under review for a downgrade. But yesterday's auction stilled those fears for the moment, and Moody's has now said it doesn't see a downgrade happening.
Part of this has less to do with America's troubles and more to do with troubles that are still growing in Europe. Greece's credit rating actually was cut yesterday, all the way down to CCC. For all the problems this nation is facing, we're still a lot better off than the rest of the world.
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