MNI BRIEF: US Treasury Plans to Cut Debt Issuance

The U.S. Treasury Wednesday announced the first reduction in its quarterly sale of longer-term debt in more than five years on Wednesday, reflecting diminishing borrowing needs as the wave of pandemic-relief spending ebbs.

The department said it it will issue USD120 billion of securities at next week's quarterly refunding, down from the prior quarter's record USD126 billion and raising USD44.1 billion in new cash.

Officials say they plan to sell USD56 billion in 3-year notes on Nov. 8, USD39 billion in 10-year notes on Nov. 9, and USD25 billion in 30-year bonds on Nov. 10.

Over the next three months, changes in nominal coupon and FRN auction sizes announced Wednesday will result in a USD84 billion reduction of issuance. Treasury anticipates incrementally reducing the sizes of the 2-, 3-, and 5-year note auctions by USD2 billion per month, shrinking the size of the 7-year note auction by USD3 billion per month over the next three months, and decreasing by USD2 billion the new and reopened 10-year note auction sizes and new and reopened 30-year bond auction sizes starting in November.

Treasury also anticipates decreases of USD4 billion to both the new and reopened 20-year bond auction sizes starting in November.

The coupon-bearing auction trimming should give Treasury room to bolster bill supply -- once it's no longer constrained by the limits of its borrowing authority. "Treasury anticipates that the supply of bills will generally decline from current levels until Congress acts again to increase or suspend the debt limit," the department said.

Anticipated Auction Sizes (billions USD)