The United States will gradually cut back the size of two- and three-year note auctions over the next three months to reflect a better budget outlook, the U.S. Treasury said on Wednesday.
In a statement, Treasury Deputy Assistant Secretary for Federal Finance James Clark said the reductions would begin with the November three-year note auction announced on Wednesday.
“The magnitude and duration of the offering-size reductions will depend on the pace and extent of the fiscal improvement,” he said.
A Treasury official said the reductions would probably be in line with recent cuts, of about $1 billion per month in each security.
“I expect it’s going to follow much the same pattern as recent coupon reductions that we have had, so that’s a billion per month for the next three months,” he said.
That would equate to an annualized $66 billion reduction in total issuance if the reductions stopped after three months, the official said.
via CNBC
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.