Highlights
The Treasury raised its quarterly refunding package to $121 billion, up $9 billion from $112 billion last time, to refund $105.1 billion in Treasury notes and bonds maturing on Feb. 15, 2024, and raise $15.9 billion in new cash from private investors.
Markets were generally expecting an increase of $9 billion to $121 billion from last quarter's $112 billion total.
The refunding package consists of $54 billion in 3-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds. The rest of Treasury's 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.
"Treasury intends to continue gradually increasing coupon auction sizes in the February to April 2024 quarter and believes that these cumulative changes will leave Treasury well positioned to address potential changes to the fiscal outlook and to the pace and duration of future SOMA redemptions," the refunding announcement said.
The Treasury said it does not expect to make any more increases in nominal coupon or FRN auction sizes, beyond those being announced today, at for least the next several quarters.
The Treasury said it will raise the auction sizes of the 2- and 5- year by $3 billion per month, the 3-year by $2 billion per month, and the 7-year by $1 billion per month. As a result, the auction sizes of the 2-, 3-, 5-, and 7-year will increase by $9 billion, $6 billion, $9 billion, and $3 billion, respectively, by the end of April 2024.
Treasury plans to increase both the new issue and the reopening auction size of the 10-year note by $2 billion and the 30-year bond by $1 billion. Treasury plans to maintain the 20-year bond new issue and reopening auction size.
Treasury plans to increase the February and March reopening auction size of the 2-year FRN by $2 billion and the April new issue auction size by $2 billion.
Markets were generally expecting an increase of $9 billion to $121 billion from last quarter's $112 billion total.
The refunding package consists of $54 billion in 3-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds. The rest of Treasury's 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.
"Treasury intends to continue gradually increasing coupon auction sizes in the February to April 2024 quarter and believes that these cumulative changes will leave Treasury well positioned to address potential changes to the fiscal outlook and to the pace and duration of future SOMA redemptions," the refunding announcement said.
The Treasury said it does not expect to make any more increases in nominal coupon or FRN auction sizes, beyond those being announced today, at for least the next several quarters.
The Treasury said it will raise the auction sizes of the 2- and 5- year by $3 billion per month, the 3-year by $2 billion per month, and the 7-year by $1 billion per month. As a result, the auction sizes of the 2-, 3-, 5-, and 7-year will increase by $9 billion, $6 billion, $9 billion, and $3 billion, respectively, by the end of April 2024.
Treasury plans to increase both the new issue and the reopening auction size of the 10-year note by $2 billion and the 30-year bond by $1 billion. Treasury plans to maintain the 20-year bond new issue and reopening auction size.
Treasury plans to increase the February and March reopening auction size of the 2-year FRN by $2 billion and the April new issue auction size by $2 billion.
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.
