The U.S. Treasury is scheduled to release its Quarterly Refunding statement on Wednesday, January 31 at 8:30 am ET, detailing the amount it plans to raise in the coming quarter. Financial markets typically favor a lower-than-expected total and react negatively to higher planned issuance. Recent announcements suggest marketable debt sales are lower than expected, hinting at a shrinking U.S. deficit and the possibility of the Reverse Repo facility being fully drained by Q2. The Federal Reserve's QT policy may be impacted, as less Treasury issuance theoretically permits more aggressive QT. Repo rates and RRP levels, as noted by Fed officials, will be key indicators for timing the taper. The Treasury Department's strategy may be influencing yields, as suggested by the projected funding gap chart from @3F_Research and commentary on the actual increase in marketable Treasuries versus the figures in the Quarterly Refunding documents. Some analysts predict U.S. yields may re-test the 5¼% level.
A ‘Back Seat’ Bond Yield Driver: US Treasury Is Forcing The Fed To End QT. US Yields To Re-Test 5¼%?. Read more: https://t.co/4vKTDLkwL9
Treasury Department Trying Very Hard to Push Down Yields with its Quarterly Refunding Announcements. So We Take a Look The actual actual increase in marketable Treasuries is far higher than the “actual” increase in the Quarterly Refunding documents https://t.co/L2rngwb5Bk https://t.co/RbpN5L2aRj
US Treasury QRA borrowing forecast for Q1 and Q2 2024 seems to imply that the US deficit is going to shrink this year. @concodanomics - you know what this means.... 😎 https://t.co/SWlEzaLazi
The fusion of monetary and fiscal policy should be on full display this week. Less Treasury issuance should - theoretically - allow the Fed to press ahead with QT. Chart below shows the projected funding gap based on various QT paths. @3F_Research https://t.co/DJTI5Vptfm
The Treasury has announced marketable debt sales lower than expected in the run-up to the Treasury Quarterly Refunding statement due on Wednesday morning. The numbers suggest the Reverse Repo facility will be fully drained by Q2. We expect sharply lower Bill issuance for one…
Treasury has an opportunity to force an early QT taper. Fed officials have pointed to repo rates and RRP levels for timing the taper, but those are directly impacted by bill supply. Further raising bill share would drain the RRP and push up all short rates https://t.co/PBSr2Zy98B
The Treasury Quarterly Refunding statement comes out this Wednesday, January 31 at 8:30 am ET. This tells us how much Treasury intends to raise in the next quarter. Financial markets like a less than expected total and react negatively when planned issuance is more than expected.…