With the Fed set to hike rates in 48 hours, it was hardly a surprise that investor demand for today’s sale of $37 billion in the 2-year paper would be lacking. However, the final result was downright ugly.

Pricing at a high yield of 2.829%, the auction tailed the When Issued 2.825% by 0.4bps, the biggest tail since April, and the highest yield since June 2008.

But it was the internals that were especially ugly, with the Bid to Cover plunging to 2.437 from 2.894 a month prior, and well below the 2.82 6 auction average. And while the Direct Bid was in line with recent auctions, at 13.40%, down from the 13.68% in August, and below the 14.7% average, it was the Indirects that were less than excited, taking only 40.0% of the $37BN for sale, the lowest since May, and leaving Dealers holding 46.6%, the highest since December 2016.

Overall, a sloppy auction which is likely the result of the imminent push higher in short-term rates which are expected to rise by 25 basis point in just two days.