Wall Street banks expect the US to borrow roughly $1tn by issuing short-term
Treasuries over the next year to meet rising financing needs, the Financial
Times reports. BofA projects net new cash borrowing excluding refunding in the
fiscal year to Sept 2027 at about $1.07tn; JP Morgan forecasts $1.09tn of
short-term issuance in 2027; Goldman sees $961bn. The rise in bill issuance
arrives as long-term borrowing costs sit at their highest since 2007; Treasury
Secretary Scott Bessent has pushed to expand 10-30yr buybacks to lower the long
end. BofA expects outstanding short-term Treasuries to climb to roughly $8tn by
next Sept, about 24.3% of marketable debt; Goldman projects 24.3% next year and
24.9% in 2028 — near pandemic highs and above the Treasury Borrowing Advisory
Committee’s ~20% suggested long-run share. Analysts say heavier bill issuance
can reduce near-term financing costs but increases future refinancing risk; BofA
rates strategist Mark Cabana warned large bill supply could make interest
expense larger and more volatile. The Fed’s purchases of short-term Treasuries
this year and roughly $8tn in money market fund assets are supporting demand for
bills.
