US Quarterly Refunding Announcement (QRA): US sets quarterly refunding at USD 125bln, as expected; to sell USD 58bln in 3-year notes, USD 42bln in 10-year notes, and USD 25bln in 30-year bonds next week

• Offering USD 125bln of Treasury securities and to refund c. USD 90.2bln of privately-held Treasury notes; will raise new cash from private investors of c. USD 34.8bln.

SUMMARY

• US Treasury to keep coupon and floating rate note auction sizes unchanged for 'next several quarters'.
• Future auction increases will consider trends on structural demand, potential costs/risks to issuance profiles.
• To keep tips auction sizes at current levels.
• To maintain offering sizes of benchmark bills at or near current levels by mid-march.
• Expects to trim short-dated bill auction sizes by late March due to April 15th tax date.
• TGA account could peak around USD 1.025tln by late April.
• Cuts in Bill auction sizes will likely lead to decline in net bill supply by USD 250-300bln by early May.

Nominal coupon and FRN financing

• Treasury believes its current auction sizes leave it well positioned to address potential changes to the fiscal outlook and to the size and composition of the SOMA portfolio.
• Based on current projected borrowing needs, Treasury anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters.
• Treasury is monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector.
• Looking ahead, Treasury continues to evaluate potential future increases to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profile

TIPS

• Plans to maintain TIPS auction sizes at current levels: 30-year TIPS new issue auction size at USD 9bln, 10-year TIPS reopening auction size at USD 19bln, and TIPS new issue auction size at USD 26bln.

Bills

• Treasury expects to maintain the offering sizes of benchmark bills at or near current levels into mid-March.
• By late March, Treasury anticipates incrementally reducing short-dated bill auction sizes in light of the April 15th tax date; reductions will likely lead to a USD 250-300bln net decline in total bill supply by early May.
• Treasury will continue to evaluate near-term borrowing needs and assess additional adjustments to bill auction sizes as appropriate.

 Buybacks:

• Treasury anticipates that, over the course of the upcoming quarter, it will purchase up to USD 38bln in off-the-run securities across buckets for liquidity support and up to USD 75bln in the 1-month to 2-year bucket for cash management purposes.

Auction Dates:

• 3-yr note on February 10th
• 10-year note on February 11th
• 30-year bond on February 12th, 2026; all to settle on February 17th