Treasury sells $70 billion in 5-year note

• The US Treasury sold $70 billion in 5-year notes with a yield of 5.033%, the highest since June 2006.
• The auction had a 3.3 basis point 'tail' (auction yield higher than 'when issued' market yield), indicating weak demand.
• Key metrics like bid-to-cover (2.21 vs. 2.34 average) and indirect bid (54% vs. 64% average) were poor, and dealers took a higher percentage (16% vs. 12% average).
• Santelli graded the auction a 'D' but attributes rising yields to market normalization and underlying economic strength (PMIs, strong dollar, AI buildout), rather than a fundamental problem.

CNBC's Rick Santelli discusses a 'poor' US Treasury 5-year note auction, which yielded 5.033% (highest since June 2006) and had a significant 'tail'. Despite the weak auction metrics, Santelli frames rising yields as a 'normalization' after years of manipulation, driven by positive economic indicators like strong PMIs, a stronger dollar, and capital in the system, suggesting that 80% of the interest rate story is good news.