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2025-07-28 19:46:47
[The US fiscal deficit is approaching $2.8 trillion, and the Treasury Department may delay the issuance of long-term bonds to "increase revenue and reduce expenditure"] ⑴ The market generally expects the US Treasury to maintain the current auction size of notes and bonds this week. ⑵ Although the US budget deficit is expected to surge to $2.8 trillion over the next decade, the Treasury may not fill the gap by increasing long-term debt for the time being. ⑶ The core of this strategy is to take advantage of the strong demand for short-term Treasury bills (T-bills). ⑷ Banks expect that by the end of this year, the additional supply of T-bills will be between $620 billion and $800 billion, and money market funds with assets of more than $7 trillion will be the main undertakers. ⑸ Given the Federal Reserve's interest rate policy, long-term yields remain high, and issuing short-term debt can reduce borrowing costs. ⑹ In addition, some analysts predict that the Treasury may not begin to increase the size of long-term auctions until 2027. ⑺ The market's focus will turn to the quarterly borrowing requirements announced on Monday night for more clues
