The US Treasury removed the word "at least" from guidance on future auction
sizes and said it expects auction sizes for floating-rate notes and fixed-coupon
bonds to remain unchanged for "the next few quarters." Analysts interpret "few"
as likely two quarters, implying the Treasury could change sizes in 1H 2027.
Market participants expect any increase in issuance to concentrate in 2–7y
tenors, with the 10y also a candidate for larger size, while 20y and 30y
auctions—which have sometimes struggled for demand—are most likely to be
trimmed. The Treasury said it will assess adjustments based on structural demand
trends and the cost and risk profiles of different issuance structures, and will
engage with market participants as it seeks to fund at lowest long-term cost.
Next week’s supply: $125bn of notes—$58bn 3y, $42bn 10y and $25bn 30y.
