There were no surprises in the Treasury's announcement of the quarterly refunding, a plain-vanilla $96 billion package to refund $75.2 billion in Treasury notes and bonds and raise $20.8 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. The balance of the funding needs will be met with the weekly T-bill auctions, cash management bills (CMBs), the monthly note, bond, Treasury Inflation-Protected securities (TIPS) auctions, and 2-year Floating Rate Note (FRN) auctions.

Of note, the Treasury said it expects to go live with its proposed buyback program sometime in 2024.

The Treasury said its current issuance sizes are fine for near-term needs and that it expects to leave the amounts unchanged during the May-July 2023 for new issuance of coupons, floating rate notes, and for reopenings. Treasury added that intermediate- and long-term borrowing needs may call for a modest increase in auction sizes later in the year, possibly as soon as the August 2023 refunding announcement.

Regarding the debt limit, Treasury repeated that the dreaded X-date could come by early June and as early as June 1 if the limit is not suspended or raised. In the meantime, it said there may be more than usual variability in bill issuance and heavy use of CMBs.

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.

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.