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The US Treasury has cut its federal borrowing estimate for the current quarter from $852 billion to $776 billion, following an upgrade in revenue projections. Wall Street dealers expect a record auction of $114 billion of notes and bonds next week. However, the Treasury has signaled a lower-than-expected year-end bond supply, with future increases anticipated. To manage the growing debt load and higher rates, the Treasury has detailed plans to increase bond sales. It has also raised its quarterly refunding to $112 billion, a $9 billion increase, and will auction 3-, 10-, and 30-year Treasuries next week, including $24bn in 30yr bonds, $40bn in 10yr notes, and $48bn in 3yr notes. The Treasury also plans to gradually increase the size of most of its debt auctions in the November 2023 to January 2024 quarter, expecting one more quarter of increases after this. However, the pace of longer-dated debt issuance will slow down.
