The numbers: The Treasury Department announced it will begin to sell a new 2-month bill starting in October. Unlike the Treasury’s traditional bill settlement day of Thursday, the new 2-month bill will settle on Tuesdays. The first auction of 2-month bills will be announced on Oct. 15.
What happened: Treasury also announced it will sell $78 billion in notes and bonds next week at its quarterly refunding auction. This is $5 billion larger than the package announced last quarter.
The department will auction $34 billion in 3-year notes TMUBMUSD03Y, +0.41% on Aug. 7 and $26 billion in 10-year notes TMUBMUSD10Y, +0.94% on Aug 8. They government will also sell $18 billion in 30-year bonds TMUBMUSD30Y, +1.23% on Aug. 9. The department also announced increases to the auction sizes of other securities by a total of $30 billion this quarter.
Treasury said it is still analyzing introducing a new 5-year Treasury inflation-protected security. Any change to the inflation-protected securities calender will likely be announced at the next quarterly refunding in November. The department said that, at that time, it would also assess the need to make further adjustments to auction sizes.
Big picture: Treasury is on track to issue over $1 trillion dollars in marketable debt this fiscal year, the most debt that private investors have had to absorb since 2012. The financing needs stem from the rising deficit and the unwinding of the Federal Reserve’s balance sheet.
