Deutsche Bank strategists say the US Treasury has asked primary dealers for
views on structural shifts in investor demand and expectations for future
Treasury auction sizes — a key step toward altering issuance. DB's analysis of
Treasury holdings and portfolio-weighted average maturity (WAM) shows demand for
long-dated Treasuries has weakened, driven by shrinking buy-and-hold portfolios
and a shift toward shorter tenors. With larger financing needs ahead and WAM
near historic highs, strategists say there is increasing justification to
proactively shorten the maturity profile of new issuance.
