Treasury to cut auction sizes for coming quarter

div classBodysc17zpet90 cdBBJodivpReuters – The U.S. Treasury Department said on Wednesday it would continue reducing its coupon issuance across all maturities in the coming quarter, with the largest cuts coming in the sevenyear and 20year maturities.p

pThe Treasury said it was trimming issuance, but by smaller increments than in previous quarters, based on projected borrowing needs that include recent strong tax receipts and potential redemptions of Treasury securities by the Federal Reserve. pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe Treasury said additional reductions may also be necessary, depending on developments in its projected borrowing needs. p

pThe U.S. government had increased auction sizes in 2020 to pay for coronavirusrelated spending. p

pThe Treasury said it expects to cut the size of 2, 3 and 5year note auctions by 1 billion each per month over the coming quarter, while 7year auctions will be cut by 2 billion per month in the same period.p

pNew and reopened 10year note and 30year bond auctions will also be reduced by 1 billion, while the 20year bond auctions will be cut by 2 billion.p

pThe Treasury also said it expects to maintain the size of its May reopening auction of 10year Treasury InflationProtected Securities TIPS at 14 billion. It will increase the size of the June fiveyear TIPS reopening auction by 1 billion to 18 billion and increase the July 10year TIPS new issue auction by 1 billion to 17 billion. p

pThe Treasury said it will sell 45 billion in threeyear notes, 36 billion in 10year notes and 22 billion in 30year bonds next week.p

pThe U.S. Treasury said on Monday it expects to pay down 26 billion in debt the second quarter, down from a January borrowing estimate of 66 billion, primarily because of an increase in receipts. The secondquarter estimate assumes an endofJune cash balance of 800 billion.p

Reporting by Alden Bentley Editing by Andrew Heavens

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