US Treasury to Reduce Auction Sizes Further Over Next 3-Month
The US Treasury intends to reduce the size of its coupon offerings further due to lower projected borrowing needs, Treasury’s quarterly refunding announcement Wednesday showed.
The changes would amount to a $111 billion reduction in issuance over the next three months. “Given the latest forecasts of borrowing needs, Treasury intends to continue reducing auction sizes across all nominal coupon securities during the upcoming February to April 2022 quarter,” the Treasury said in its statement.
“While these changes will make substantial progress towards aligning auction sizes with intermediate-term borrowing needs, additional reductions may be necessary depending on developments in projected borrowing needs going forward.”
Treasury will reduce the size of its 2-year, 3-year and 5-year notes by $2 billion per month over the next three months, and the 7-year note by $3 billion per month over the next three months.
The new and reopened 10-year and 30-year auction sizes are expected to be reduced by $2 billion each, while the new and reopened 20-year sizes will be reduced by $4 billion each.
The sizes of the February and March FRN reopening auctions and the April new 2-year FRN auction will each be reduced by $2 billion. Treasury expects to maintain the size of its 10-year TIPS and 30-year TIPS auctions over the next three months and to increase the size of its April 5-year TIPS auction.
Next week, the agency will sell $50 billion of 3-year notes, $37 billion of 10-year notes, and $23 billion of 30-year bonds. Any unexpected borrowing needs will be met by changes in regular bill or cash management bill sizes, Treasury said. #US Treasury to Reduce Auction Sizes Further Over Next 3-Months
Read: DMO Announces Borrowing Plan for First 3-Month
