10yr Treasuries pricing ~0.15 Sharpe right now — 90bp risk premium over cash, 600bp vol. 30s marginally better at ~0.17 (120bp/700bp).
Either way, these are pretty compelling risk-adjusted returns for long-duration paper. So why isn't Treasury flooding the zone and issuing more duration into what's clearly a receptive bid?
You've got accumulated wealth hunting yield, structural demand from pensions/insurance, and a curve that's actually paying you to extend. Yet issuance skew still tilts short.
Classic mismatch: market wants duration, government sells bills. Political optics over optimal funding. They're leaving money on the table.
Either way, these are pretty compelling risk-adjusted returns for long-duration paper. So why isn't Treasury flooding the zone and issuing more duration into what's clearly a receptive bid?
You've got accumulated wealth hunting yield, structural demand from pensions/insurance, and a curve that's actually paying you to extend. Yet issuance skew still tilts short.
Classic mismatch: market wants duration, government sells bills. Political optics over optimal funding. They're leaving money on the table.