Quarterly Refunding Statement of Assistant Secretary for Financial Markets Josh Frost

On August 2, 2023, the US Department of the Treasury (USDT) announced its projected financing needs and the tentative issuance schedule for U.S. government securities between August and October 2023, inclusive. The following graphic depicts the intended issuance sizes and maturities.
Graphic 1 – Tentative Government Securities Issuance Schedule

The USDT thereby also provides some further information for investors as regards its plans to increase issuance sizes. Specifically, over the next three months, the Treasury Department plans to gradually raise the sizes of its bond auctions across all maturities. The increase in auction sizes will thereby be different for different bond tenors. For instance, the auction sizes for 2-year and 5-year bonds will each rise by $3 billion per month, while the 3-year bond auction size will go up by $2 billion per month, and the 7-year bond auction size will increase by $1 billion per month. By the end of October 2023, this will result in a cumulative increase of $9 billion, $6 billion, $9 billion, and $3 billion for the 2-year, 3-year, 5-year, and 7-year bonds, respectively. Similarly, the Treasury Department plans to increase both the auction size for newly issued bonds and the auction size for reopening (reissuing) bonds with maturities of 10 years or beyond. Finally, the USDT plans to increase the auction sizes for certain Floating Rate Notes (FRNs) as well. Specifically, the auction size for the 2-year FRN will increase by $2 billion for both the August and September reopening auctions, and the October new issue auction size will also rise by $2 billion.