Mnuchin's Treasury Poised to Rev Up Supply as Budget Gap Widens
- Refunding announcement May 2 seen bringing auction-size boost
- Across-the-board increases expected, including for TIPS
Photographer: Andrew Harrer/Bloomberg
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The U.S. government’s need for new financing, rising in part from tax cuts and increased spending under President Donald Trump, has Wall Street predicting the Treasury will ramp up borrowing yet again next week.
Treasury officials are set to announce this quarter’s funding plans on May 2, and bond dealers expect another across-the-board boost to auction sizes, including for inflation-linked debt. The nation’s fiscal overseers may have little choice, with deficits projected to surpass $1 trillion by 2020. The deterioration in federal finances, which is putting the U.S. debt profile on track to resemble Italy’s, is becoming more glaring ahead of crucial midterm elections in November.