The US Treasury has determined the US borrowing program, which is more important than the decision of the Federal Reserve (Fed), due to the impact of the course of bond yields in global markets. The Treasury decided to slow down the rate of increase in quarterly issuances of long-term bonds.
The US Treasury determined the US borrowing program at a time when the course of bond yields in global markets was more important than the decision of the Federal Reserve (Fed). The Treasury decided to slow down the rate of increase in quarterly issuances of long-term bonds.
In the statement made by the Ministry of Treasury, information was given about 3 bond auctions that will be held next week. It was announced that bonds worth $48 billion with a 3-year maturity would be issued on November 7, bonds with a maturity of 10 years worth $40 billion on November 8, and bonds with a maturity of 30 years worth $24 billion on November 9. In the statement, it was stated that a total of 112 billion dollars of government bonds would be sold, and that these issues would create approximately 9.8 billion dollars of new cash.
In the statement, it was informed that the auction amounts are planned to be gradually increased in the period from November to January 2024, in order to meet the medium and long-term borrowing needs in the coming period.
Many major institutions had announced a forecast of $114 billion for bond issues to be made by the US Treasury. However, there were significant differences in this borrowing program compared to August. The most striking difference was that the rate of increase in sales of 10- and 30-year bonds was slower, while there was no change in 20-year bonds.
Since August, 10-year bond yields have risen 75 basis points or more, pushing yields higher. Although U.S. Treasury Secretary Janet Yellen rejected the notion that increased government borrowing caused the increase, market participants noted growing concerns about the widening U.S. fiscal deficit. The Treasury stated that long-term debt will be issued quarterly and foresees only a single additional increase.
The following statements were used in the Treasury’s statement: ‘Since these changes will provide significant progress towards aligning auction sizes with projected borrowing needs, the Treasury anticipates that an additional one-quarter increase in coupon auction sizes will be needed beyond the increases announced today.’”