Direct bidders now take about a quarter of Treasury note auctions, up from under a fifth

Direct bidders took 41.3% of the competitive amount at the Treasury's 2-year note auction on October 26, the largest share of any of the 39 auctions of 2-, 5- and 7-year notes held since October 2025 (computed), according to TreasuryDirect auction data. Across the 5- and 7-year auctions, their average share has risen to 25.7% from 19.4% in 2022, while primary dealers' share has fallen.

What the auction data show

TreasuryDirect reports, for every auction, how much of the competitive bids accepted went to three groups: direct bidders, indirect bidders and primary dealers. The shares below are each group's awarded amount divided by the competitive amount accepted inside the offering, computed for each auction and then averaged across the 5- and 7-year auctions of the period. The 2-year note is left out of the table because the data returned for it start in October 2024.

Period	Auctions	Direct bidders	Indirect bidders	Primary dealers
2022	24	19.4%	65.0%	15.6%
2023	24	18.2%	68.8%	13.0%
2024	24	17.4%	69.4%	13.2%
2025	24	24.5%	65.0%	10.5%
October 2025 to October 2026	26	25.7%	62.5%	11.8%

Direct bidders averaged 19.4% in 2022, 18.2% in 2023 and 17.4% in 2024 before rising to 24.5% in 2025 (computed). Primary dealers moved the other way, from 15.6% in 2022 to 10.5% in 2025 (computed). Indirect bidders, the largest group in every period, averaged between 62.5% and 69.4% (computed).

The latest week

The three auctions of the week of October 26 each fit the pattern. At the 2-year sale, direct bidders were awarded 41.3% of the competitive amount, indirect bidders 45.7% and primary dealers 13.0% (computed). At the 5-year sale on October 27, direct bidders took 29.4% and primary dealers 10.6%. At the 7-year sale on October 29, which FinanceInTime reported separately, direct bidders took 32.8% and primary dealers 9.4% (all computed).

In September the same three sales gave direct bidders 29.0%, 29.9% and 30.3% (computed), so the October 2-year sale's share was 12.3 percentage points above September's (computed).

By maturity

Over the 13 months from October 2025, the three maturities differ in who bought. The 2-year auctions had the largest direct share and the 5- and 7-year auctions a larger indirect share (all averages computed per auction).

Maturity	Auctions	Direct bidders	Indirect bidders	Primary dealers	Bid-to-cover
2-year	13	30.9%	56.9%	12.1%	2.62
5-year	13	25.1%	62.8%	12.1%	2.33
7-year	13	26.2%	62.1%	11.6%	2.48

The direct share at 2-year sales ranged from 16.5% in March 2026 to the October 2026 high of 41.3% (computed). Primary dealers' share in the 39 auctions ranged from 7.3% to 24.1% (computed), and was lowest at the 2-year sale of January 26, 2026. Dealers' share therefore moved in a narrower band than the direct share did, and the October 29 sale's 9.4% is within the bottom third of that band (computed).

How often direct bidders passed a quarter

A count of auctions gives the same picture as the averages. Direct bidders took more than 25% of the competitive amount at 2 of the 72 5- and 7-year auctions held from 2022 to 2024, and at 18 of the 26 held from October 2025 to October 2026 (computed). They took more than 30% at 0 and 6 of those auctions, respectively (computed). The threshold is arbitrary, but the counts show that the higher average does not come from a single outlier.

Demand by the usual measure did not change

The bid-to-cover ratio, total bids divided by the amount sold, shows no matching trend. The 5- and 7-year auctions averaged 2.45 in 2022 and 2.40 in the latest 13 months (computed), a difference of 0.04. At the three October sales the ratios were 2.59, 2.33 and 2.46, according to the same data. A ratio near 2.4 to 2.5 means that bids of roughly two and a half times the amount on offer were received, and that level appears in every period of the table. The measure does not capture who bought, which is why the group shares are the more informative figures here.

Yields rose while the mix changed

The yields at which the sales cleared moved a long way over the same period. The 5-year note cleared at its 13-month high of 5.033% at the September 23 sale and at 4.845% on October 27. The 7-year sale cleared at 3.790% in October 2025 and at 4.894% on October 29. The data do not show whether higher yields drew direct bidders, whether dealers stepped back for other reasons, or whether the way bids are classified changed.

The background

FinanceInTime has tracked the same auctions from several sides. An earlier analysis of Treasury demand looked at the 20-year bond sale and money market fund assets, and a report on the 2-year and 5-year sales gave the first two results of the week. This analysis adds the long-run split among bidders, which those pieces did not examine.

Limits of the comparison

The average for each year weights every auction equally, regardless of its yield or the market on the day. The 2-year note is excluded from the multi-year comparison, and the 2022 sample covers 24 auctions. TreasuryDirect's categories are reported by the Treasury and the data say nothing about the ultimate buyers behind a direct or indirect bid. A share can move by several points between two auctions with no lasting change, as the 7-year sale in May 2026, when direct bidders took 11.2%, shows (computed).

What to watch

The next 2-, 5- and 7-year auctions will add three more observations of the three shares. Whether direct bidders' share stays above a quarter of the 5- and 7-year sales, or returns toward the 2022 to 2024 range, can be read from those results as TreasuryDirect publishes them.