> Then the treasury fills these orders from the lowest to highest bid

No, it does not. Treasury goes down the list until it has allocated the auction and then everyone gets the marginal rate. (And that's for competitive bids. You can also submit a non-competitive bid with no price–that gets filled first.)

> US paying the highest rates in 25 years means the buyers are expecting higher premiums

Would recommend looking up credit versus rates. It’s a useful construct.

> they ask them because they are worried about inflation

Nope. Do you know what TIPS are? You can compare the price of a normal Treasury and a TIP to get what Treasury buyers think about inflation. That's the breakeven-inflation rate in my top comment.

If you say you think they're wrong, I think I might agree. But the data–Treasury auction and insurance data–speak unambiguously to these points of investors' views, specicially, creditworthineness and inflation expectation.