Highlights
The Treasury said it will offer a quarterly refunding package of $125 billion to refund $89.8 billion in maturing securities and to raise $35.2 billion in new cash from private investors.
The refunding package consists of $58 billion in 3-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds, all unchanged from the previous refunding offering. 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 said its current auction sizes leave it well positioned to address potential changes to the fiscal outlook and to the pace and duration of future SOMA redemptions. Based on current projected borrowing needs, Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters.
Regarding bill issuance, Treasury said it expects"further marginal increases in short-dated Treasury bill auction sizes in the coming days and then maintaining sizes at or near those levels through the end of September." More increases to Treasury bill auction sizes are anticipated in October."Treasury will carefully monitor market conditions and adjust its bill issuance plans as appropriate," it said.
Regarding buybacks, effective Aug. 13, Treasury said it will double the frequency of long-end nominal coupon liquidity support buybacks; make a technical adjustment to the TIPS buyback buckets; raise the size of cash management buybacks; and allow a limited number of additional counterparties to directly access buyback operations. Treasury said it would be increasing the frequency of liquidity support buybacks in both the 10- to 20-year and 20- to 30-year nominal coupon buckets from two times per quarter to four times per quarter.
The refunding package consists of $58 billion in 3-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds, all unchanged from the previous refunding offering. 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 said its current auction sizes leave it well positioned to address potential changes to the fiscal outlook and to the pace and duration of future SOMA redemptions. Based on current projected borrowing needs, Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters.
Regarding bill issuance, Treasury said it expects"further marginal increases in short-dated Treasury bill auction sizes in the coming days and then maintaining sizes at or near those levels through the end of September." More increases to Treasury bill auction sizes are anticipated in October."Treasury will carefully monitor market conditions and adjust its bill issuance plans as appropriate," it said.
Regarding buybacks, effective Aug. 13, Treasury said it will double the frequency of long-end nominal coupon liquidity support buybacks; make a technical adjustment to the TIPS buyback buckets; raise the size of cash management buybacks; and allow a limited number of additional counterparties to directly access buyback operations. Treasury said it would be increasing the frequency of liquidity support buybacks in both the 10- to 20-year and 20- to 30-year nominal coupon buckets from two times per quarter to four times per quarter.
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.
