Wall Street Braces for Biggest Treasury Issuance Shift Since 2024

The U.S. Treasury is due to release its quarterly refinancing statement on Wednesday, with Wall Street focused on whether it changes guidance for Treasury issuance. The decision could mark the largest policy shift since early 2024, after more than two years of relatively stable medium- and long-term issuance plans. Citigroup expects Treasury to begin reducing 20-year and 30-year bond auction sizes this month. A change in issuance guidance could create room for lower issuance of the longest maturities by 2027, although UBS expects actual auction sizes to remain unchanged until May next year. Long-term Treasury yields reached their highest level in more than two decades in early October before retreating. The 30-year yield was still above 5.30% as of last Friday. Treasury has also increased buybacks of 10- to 30-year securities to $6 billion per operation, three times the prior size. A shift toward shorter-dated bills would increase refinancing needs. Bills already represented about 22% of outstanding debt as of September, above the Treasury Borrowing Advisory Committee's roughly 20% long-run preference. Weekly bill auctions exceed $500 billion, while Treasury issuance totaled a record $839 billion last week. If auction sizes remain unchanged, this week's quarterly refinancing will total $125 billion: $58 billion of 3-year notes on November 9, $42 billion of 10-year notes on November 10, and $25 billion of 30-year bonds on November 12. Market participants are also watching whether Treasury gives buybacks a clearer role in managing the maturity profile of outstanding debt.