{"id":4821,"date":"2026-08-03T16:38:40","date_gmt":"2026-08-03T16:38:40","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=4821"},"modified":"2026-08-03T16:38:40","modified_gmt":"2026-08-03T16:38:40","slug":"bessent-seen-rebuffing-wall-street-on-guidance-for-u-s-debt-sales","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=4821","title":{"rendered":"Bessent seen rebuffing Wall Street on guidance for U.S. debt sales"},"content":{"rendered":"
\n

Ahead of a quarterly policy\u00a0statement\u00a0on debt strategy Wednesday, most dealers see the Treasury reiterating it expects no increases in note and bond issuance \u201cfor at least the next several quarters.\u201d That forward guidance dates back to the Biden administration, and was once\u00a0criticized\u00a0by Bessent as designed to tamp down longer-term borrowing costs ahead of the November 2024 election.<\/p>\n

Read more PwC U.S. CEO advises young workers to say yes a lot, even if it means working on the weekends\u2014\u2018That person climbs into the next role\u2019<\/a><\/p>\n

Today, it\u2019s President Donald Trump\u2019s Republicans facing midterm elections, with every interest in avoiding any further\u00a0climb in yields\u00a0\u2014 the potential result of any signal of increased auction sizes. Yields on 30-year bonds last week already hit their highest levels since 2007, making them so costly compared with shorter maturities that many dealers doubt the Treasury will boost their sales at all in coming years.<\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n

Bessent since taking office has relied on bills, which mature in up to a year, to meet the government\u2019s increasing borrowing needs. As their rates are lower, that\u2019s helped temper the Treasury\u2019s costs. But the strategy comes with risks: continuing to lean on bills means debt-servicing costs become sensitive to front-end rate shocks, at a time when investors are betting the Federal Reserve will be forced to tighten monetary policy over the coming months.<\/p>\n

\u201cIt behooves Treasury to open up some optionality\u201d by tweaking its guidance, said Blake Gwinn, head of US rates strategy at RBC Capital Markets. \u201cThis would come with the risk of pushing up yields. But this shift will come sooner or later, and waiting longer may only increase the perceived importance \u2014 and market impact \u2014 of its eventual removal.\u201d<\/p>\n

Economists see the federal budget deficit running at roughly a $2 trillion pace for years to come, which means the government will have to borrow an ever-increasing amount.<\/p>\n

The department on Monday is due to update its estimate of expected borrowing needs for the current quarter, ahead of Wednesday\u2019s so-called quarterly refunding announcement. In May, it penciled in $671 billion in net borrowing for the three months through September.<\/p>\n

\n
<\/div>\n<\/div>\n

Bank of America Corp. calculates that, if the Treasury keeps issuance of coupons, or interest-bearing securities, stable through the 2027 fiscal year, the T-bill share of outstanding debt would hit nearly 25% \u2014 the highest since 2004 after leaving out the Covid and global financial crisis shocks.<\/p>\n

Since the last refunding in May, dealers have pushed out the date by when they anticipate the Treasury will boost coupon sales, with many gravitating toward May 2027.<\/p>\n

\n
\n
<\/div>\n<\/div>\n<\/div>\n

As for next week\u2019s\u00a0, unchanged issuance sizes would mean they will consist of:<\/p>\n

\n
<\/div>\n<\/div>\n