A U.S. Treasury auction of short-term debt Thursday indicated investors' appetite for the securities remained firm, as turbulence hit long-term bonds.

The Treasury auctioned $117 billion in four-week bills and $106.4 billion in eight-week bills.

The four-week auction had a yield of 3.640%, down from a market level of 3.676% beforehand, according to Tradeweb, and compared with 3.625% in last week's offer.

The eight-week tender cleared at 3.655%, down from 3.727% market level and compared with 3.665% in the previous auction.

The fact that the auction yield was lower than market pricing indicates robust demand for the securities.

The bid-to-cover ratio, another measure of investor demand, was 2.84 in the four-week auction, little changed from the 2.87 prior six-month average. The eight-week ratio was 3.06 compared with a 2.90 average.

The auctions come at a turbulent time for bonds, as investors fret about gaping budget deficits.

The U.S. Treasury has been increasing its reliance on short-term borrowing, as long-term rates spike. News Wednesday that the Treasury will increase its buyback limit for maturities of 10 years or longer sent long-term yields lower, but only temporarily.

Short-term yields, in contrast, have been declining as markets price out the risk of interest rate increases by the Federal Reserve.