The giving back: As it did last quarter, the Treasury Department said on Wednesday that it would sell $125 billion in notes and bonds next week.
This offering will pay back $116.4 billion in notes that are due on November 15 and bring in about $8.6 billion in new cash.
On November 4, the government will sell $58 billion in 3-year notes TMUBMUSD03Y4.100%, and on November 5, it will sell $42 billion in 10-year notes TMUBMUSD10Y4.264%. There will also be a sale of $25 billion in 30-year bonds by the government on November 6.
Important facts: Treasury said in a statement that the agency “does not anticipate needing to increase nominal coupon or floating rate note auction sizes for at least the next several quarters” based on how much money it plans to borrow in the near future.
In the big picture, the Treasury market was unstable last year because people were worried that the Treasury might have to raise the sizes of auctions.
The U.S. had a $1.8-trillion deficit in the fiscal year that finished on September 30, and economists don’t think things will get better in the next few years. During this election season for president, both parties have offered more spending and tax breaks.
In the last fiscal year, the total amount borrowed by the Treasury from the public rose to $28.2 trillion. It got to 98% of GDP when you look at it as a share of GDP.
Treasury securities that protect against inflation: The department said it plans to keep increasing the sizes of TIPS auctions in small steps.
Issue of bills: The Treasury Department plans to keep issuing baseline bills until November and then issue one or two cash-management bills at the end of the month. The agency said it would take a small cut to the sizes of short-term bill auctions in December and then slowly raise them in January.
