MNI BRIEF: US Treasury Seeks Dealer Input On Coupons, Buybacks

The U.S. Treasury asked primary dealers Friday for their expectations for future coupon auction size increases and for advice on how Treasury should approach buybacks next year.

The Treasury Department's May refunding statement noted that it may need to modestly increase coupon auction sizes later this year, "potentially as soon as the August 2023 refunding announcement" due to projected intermediate- to long-term borrowing needs. Friday Treasury asked whether nominal coupon increases should be allocated across the curve and whether FRNs and/or TIPS issuance should be increased.

The agency has said it expects to begin a regular buyback program in calendar year 2024 and is asking dealers how it should approach operational design parameters for buybacks under its cash management and liquidity support objectives. The Treasury is asking dealers if it should exclude certain CUSIPs from operations.