Citigroup analysts project that the US Treasury may reduce the size of 20-year and 30-year bond auctions by $3 billion each. The firm suggests that the 20-year bond issuance might be discontinued entirely. An official announcement regarding these potential adjustments is anticipated on November 4.
The Treasury is considering a shift toward short-term bills to manage borrowing costs, which are currently near multi-decade highs. As of October 9, the 10-year yield reached 5.24%, while the 30-year yield stood at 5.60%. On October 1, the 10-year yield hit its highest point since April 2002.
The US national debt exceeded $40 trillion in August, with annual interest payments totaling approximately $1.1 trillion. While short-term bills currently offer lower yields—with the 3-month rate at 4.25% on October 9—experts from BNP Paribas and WisdomTree express skepticism regarding the long-term cost-saving potential of this strategy.
Market participants are monitoring these developments as crypto assets react to shifting yield environments. Bitcoin is currently trading at $84,030, reflecting a 1.2% increase over 24 hours. Further clarity on the Treasury's borrowing strategy is expected following a survey of bond dealers and the upcoming November 4 refunding statement.
