US Treasury Sets its Refunding at $125bn, as Expected

Treasury will sell $58bn of 3-year notes on November 9, $42bn of 10-year notes on November 10 and $25bn of 30-year bonds on November 12. The refunding of $125bn, in line with expected levels.

Treasury's November 4, 2026 refunding statement left auction sizes unchanged ($125 billion of coupons, including $58 billion of 3-year, $42 billion of 10-year and $25 billion of 30-year paper, with the 20-year and 30-year sizes also held flat). But it deleted "at least" from its long-standing guidance, so it now only "anticipates maintaining" sizes for the next several quarters and every refunding is live. Treasury also said it is evaluating future changes with a focus on structural demand, added a line about monitoring Fed bill purchases, kept buybacks large, and will move the 7-year note to a quarterly new issue starting in March 2027.

Citi's call for $3 billion cuts to 20-year and 30-year auctions proved early, while Goldman's forecast of revised guidance and eventual increases concentrated in 2-year to 7-year sizes starting in May 2027 came closest. The Treasury Borrowing Advisory Committee agreed that coupon increases will be warranted later in fiscal 2027, but members debated the pace and sizing at the long end, and some are open to cutting 20s and 30s. The committee also told Treasury to manage maturity through auction sizes rather than buybacks.

The pressure behind all this is a projected $2.14 trillion funding shortfall in fiscal 2028-29 at current coupon sizes. For now it is being plugged with bills, which pushes the bill share to 23% of marketable debt (heading toward 28% by 2029) just as Fed bill buying and money fund demand fade.