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2026-11-02 08:14:26
[Expectations of Bessant's intervention in the bond market are rising, and Wall Street is preparing for the biggest adjustment to US Treasury issuance guidance] (1) US Treasury Secretary Scott Bessant has unexpectedly shown a willingness to intervene in the bond market and push yields down in recent months; now Wall Street is preparing for the biggest adjustment to US Treasury issuance guidance since early 2024. Many traders expect the US Treasury to revise the relevant guidance in its quarterly policy statement—which has indicated that medium- and long-term Treasury issuance will remain stable for more than two years. (2) Changes in Wednesday's statement could pave the way for a reduction in the issuance of the longest-term Treasury bonds in 2027, while increasing the size of Treasury bill and shorter-term Treasury bond auctions to balance it out; some institutions are preparing for more aggressive measures. (3) Citigroup expects the Treasury to announce a reduction in 20-year and 30-year Treasury bond issuance starting this month, which would effectively contradict the guidance given in the previous so-called quarterly refinancing statement. Just one week after the previous program was announced, Bessant unexpectedly expanded its repurchase of existing Treasury bonds, a move seen as a response to soaring yields.
