Key Facts
• U.S. Treasury to release quarterly auction details on July 30.
• Current focus: sustainability of reliance on short-term securities (T-bills).
• Treasury Secretary Scott Bessent opposes increasing medium- and long-term bond issuance.
• August auction to issue $125 billion in bonds:
– August 5: $58 billion in 3-year bonds.
– August 6: $42 billion in 10-year bonds.
– August 7: $25 billion in 30-year bonds.
• Analysts expect no changes to medium- and long-term bond issuance guidance.
• Potential removal of “at least” wording in guidance could signal 2026 issuance increase.
• Bank of America revised forecast, delaying medium- and long-term bond issuance expansion to 2027 or later.
• Treasury’s reliance on T-bills could raise their share to 27% by 2028, surpassing 2020 levels.
• Treasury may set a “soft cap” of 25% for T-bill share of total debt.
Summary
The U.S. Treasury will announce details of its quarterly auction on July 30, with a focus on its reliance on short-term securities (T-bills) and potential changes to medium- and long-term bond issuance guidance. Treasury Secretary Scott Bessent has reiterated his stance against increasing medium- and long-term bond issuance due to high yields. The August auction will issue $125 billion in bonds, with no expected changes to issuance guidance. Analysts suggest that any removal of “at least” wording in the guidance could indicate plans for a 2026 issuance increase. However, Bank of America has delayed its forecast for such an expansion to 2027 or later. The Treasury’s reliance on T-bills may push their share of total debt to 27% by 2028, potentially exceeding 2020 levels, though a “soft cap” of 25% is likely.
