US Treasury Announces Major Refunding Effort

The US Department of the Treasury has revealed plans to issue $125 billion in new Treasury securities. This ambitious move aims to refinance $94.2 billion of notes maturing on May 15, leading to $30.8 billion in new borrowing.

Details of the Issuance

The issuance will feature a 3-year, 10-year, and 30-year bond, with auctions set for May 5, 6, and 8, respectively. The Treasury has indicated that auction sizes will remain consistent in the upcoming quarters, citing stable borrowing needs and ongoing redemptions for the Federal Reserve System Open Market Account (SOMA).

Enhancing Market Liquidity

In an effort to improve market liquidity, the Treasury Department is expanding Treasury Inflation-Protected Securities (TIPS) auctions. Additionally, the buyback program, initiated in May 2024, will continue, with plans for up to $50 billion in total buybacks this quarter.