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U.S. Seen Cutting Quarterly Debt Sale Once More, Ahead of Fed QT

  • Third straight reduction seen to so-called quarterly refunding
  • Inflation-linked bond sales likely to be boosted amid demand
Updated on

The U.S. Treasury will scale back its sale of longer-term debt for a third straight quarter this month to better align its issuance with government spending needs, according to most bond dealers.

While that would make for the longest stretch of cuts since 2014-2015, it may well be the final reduction for some time, given that the Federal Reserve is poised to shrink its holdings of U.S. Treasuries by hundreds of billions of dollars by year-end. That Fed balance-sheet contraction will force the Treasury Department to boost its issuance over time.