The market did have trouble digesting the amount of new debt. Treasury debt in the 5 -10 year range is going to be met with little enthusiasm for quite awhile I suspect. Who would want to go out that far on the yield curve if interest rate increases are right around the corner? (Remember that the longer the duration the more sensitive the bond is to interest rate changes)

As for the stability of the economy, if it is viewed as unstable, that would be the time to move from equities or more risky investments into Treasuries. So Greenspan’s comments, rallied Treasuries on the fear he mentioned regarding geopolitical events. So the geopolitical risks actually helped the new offering gain acceptance.