US Treasury refunding sells 125 billion dollars, makes the 7-year a quarterly issue
Serguey Asael Shinder2 min readThe US Treasury published its Quarterly Refunding Statement this week, signed by Assistant Secretary for Financial Markets Hunter McMaster, alongside the minutes of the 3 November meeting of the Treasury Borrowing Advisory Committee.
Treasury is offering 125 billion dollars of securities to refund about 97 billion dollars of privately held notes and bonds maturing on 15 November, raising about 28 billion dollars of new cash: a 58 billion dollar 3-year note auctioned on 9 November, a 42 billion dollar 10-year note on 10 November and a 25 billion dollar 30-year bond on 12 November, all settling on 16 November.
On sizes, Treasury says current auctions leave it well positioned for changes in the fiscal outlook and in the Federal Reserve's portfolio, and it expects to keep nominal coupon and floating-rate note auction sizes unchanged for the next several quarters, while monitoring the Fed's bill purchases and private demand for bills. TIPS sizes stay at current levels. Benchmark bill sizes hold into late November, a short cash management bill is possible around month-end, shorter bills shrink in December after mid-month tax receipts and grow again in January.
The structural change is to the 7-year note, which moves from a monthly new issue to a quarterly new issue with two reopenings, like the 10-year, starting with a new issue in March 2027 reopened in April and May. Treasury assumes an 850 billion dollar cash balance at the end of December, but the account could peak at 1.025 trillion dollars, plus or minus 50 billion, in late November and late January. Buybacks over the quarter run to up to 70 billion dollars for liquidity support and up to 25 billion dollars for cash management. The next refunding announcement is on 3 February 2027.
What it means
Steady coupons and a fatter cash balance mean the quarter's financing swings land on bills. Making the 7-year a reopened issue should deepen each line, a liquidity fix rather than a supply change.