Wall Street braces for the biggest adjustment in US Treasury issuance in years.

U.S. Treasury Secretary Scott Bessent has unexpectedly shown a willingness in recent months to intervene in the bond market and push yields lower, and Wall Street is now bracing for the largest adjustment to U.S. Treasury issuance guidance since early 2024. Many dealers expect the Treasury Department to revise its guidance in its quarterly policy statement. For more than two years, that guidance has indicated that medium- and long-term Treasury issuance will remain stable. A change in Wednesday's statement could pave the way for reducing issuance of the longest-dated Treasuries in 2027 while increasing auction sizes for Treasury bills and shorter-dated notes to balance it out. Some institutions are preparing for more aggressive moves. Citigroup expects the Treasury to announce cuts to 20-year and 30-year bond issuance starting this month, which would effectively defy the guidance given in the previous so-called quarterly refunding statement. Just one week after the last round of plans was announced, Bessent unexpectedly expanded buybacks of outstanding Treasuries, a move seen as a response to surging yields.