US Treasury to Auction Notes, Bonds Worth $126bn across Tenors
Next week, the United States (US) Treasury will auction note, bonds worth $126 billion across tenors amidst a slowdown in yield and inflation worries.
US Treasury does not expect to alter the sizes of its nominal couple and floating-rate notes (FRN) auctions this quarter but will continue to increase the size of its TIPS offerings, its quarterly refunding announcement Wednesday showed.
“However, continuing current issuance sizes and patterns may provide more borrowing capacity than is needed to address borrowing needs over the intermediate-to-long term,” the Treasury said in its statement.
“Accordingly, Treasury will continue to monitor the fiscal outlook while considering potential ways to reduce auction sizes in a manner that is aligned with borrowing and liquidity needs.”
Next week, the Treasury will sell $58 billion of 3-year notes, $41 billion of 10-year notes, and $27 billion of 30-year bonds.
Any unexpected borrowing needs will be met by changes in regular bill or cash management bill sizes, it said.
Treasury said that it will continue to raise the size of its inflation-protected securities auctions this quarter by $1 billion each for the 5-year, 10-year and 30-year treasury inflation protected securities (TIPS).
Any additional increases will be announced in next quarter’s refunding statement.
At the same time, Treasury will further lower its bill sizes as a per cent of total outstanding debt, starting with eliminating weekly cash management bill auctions starting in mid-August.
It noted that weekly cash management bill (CMB) issuance helped to pay for the stimulus packages over the last year.
Treasury did not provide an impact on borrowing from the expiration of the debt limit at the end of last week but noted “heightened uncertainty” until the limit is suspended or extended.
US Treasury to Auction Notes, Bonds Worth $126bn across Tenors
