Highlights
There were no surprises in the Treasury's announcement of the quarterly refunding, a $96 billion package to refund $67.1 billion in Treasury notes and bonds and raise $28.9 billion in new cash. The refunding package consists of $40 billion in 3-year notes, $35 billion in 10-year notes, and $21 billion in 30-year bonds.
Treasury said it would meet the rest of its financing need with regular weekly bill auctions, cash management bills (CMBs), and monthly note, bond, Treasury Inflation-Protected Securities (TIPS), and 2-year Floating Rate Note (FRN) auctions.
Treasury said the situation around the debt limit extension and its extraordinary measures to avoid default were adding uncertainty to its borrowing needs. Treasury said it would rely on Treasury bills rather than other securities as needed in light of these uncertainties. Until the debt limit is raised or suspended, related constraints will lead to greater-than-normal variability in bill issuance and heavy reliance on CMBs.
The Treasury repeated that it can't say for sure how long its extraordinary measures could allow it to continue paying the government's obligations but it is unlikely that cash and extraordinary measures will be exhausted before early June.
In connection with TIPS sales, Treasury plans to proceed with a planned February TIPS new issue of $9 billion followed by a March reopening of $15 billion and an April new issue of $21 billion.
Treasury said it has not decided how to proceed on possible buybacks and said the topic needs more study. On the proposed new transparency regime for Treasury securities trading, Treasury said it was making progress but had no changes ready to announce.
Treasury said it would meet the rest of its financing need with regular weekly bill auctions, cash management bills (CMBs), and monthly note, bond, Treasury Inflation-Protected Securities (TIPS), and 2-year Floating Rate Note (FRN) auctions.
Treasury said the situation around the debt limit extension and its extraordinary measures to avoid default were adding uncertainty to its borrowing needs. Treasury said it would rely on Treasury bills rather than other securities as needed in light of these uncertainties. Until the debt limit is raised or suspended, related constraints will lead to greater-than-normal variability in bill issuance and heavy reliance on CMBs.
The Treasury repeated that it can't say for sure how long its extraordinary measures could allow it to continue paying the government's obligations but it is unlikely that cash and extraordinary measures will be exhausted before early June.
In connection with TIPS sales, Treasury plans to proceed with a planned February TIPS new issue of $9 billion followed by a March reopening of $15 billion and an April new issue of $21 billion.
Treasury said it has not decided how to proceed on possible buybacks and said the topic needs more study. On the proposed new transparency regime for Treasury securities trading, Treasury said it was making progress but had no changes ready to announce.
Definition
Each quarter the U.S. Treasury announces its funding needs for the next two quarters. The announcement includes which securities will be offered and the dates of their announcement, auction and settlement.
Description
Bond market players pay attention to this release so that they know the degree of looming supply of Treasuries coming onto the market so that they can evaluate what appropriate yields might be for trading. Heavy supply coming onto the market suggests higher yields.
