US Treasury Q3 QRA: reiterates that based on current projected borrowing needs, anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters

• US Treasury keeps all nominal coupon and FRN auction sizes unchanged for August-October, including 2-year notes at USD 69bln, 3-year at USD 58bln, 5-year at USD 70bln, 7-year at USD 44bln and FRNs at USD 28bln/USD 28bln/USD 30bln (exp. unchanged)


• US Treasury makes no tenor-specific coupon changes, retaining 10-, 20- and 30-year sizes at USD 42bln/USD 16bln/USD 25bln in refunding months and USD 39bln/USD 13bln/USD 22bln otherwise (exp. unchanged)


• US Treasury maintains TIPS auction sizes at current levels, with the August 30-year reopening at USD 8bln , September 10-year reopening at USD 19bln (on 12th August) and October 5-year new issue at USD 26bln (exp. unchanged)


• US Treasury expects benchmark bill sizes to remain steady in coming weeks, with a possible short-dated CMB around end-August, shorter-dated bill cuts in September and increases across the curve in October (exp. broadly unchanged)


• US Treasury assumes a USD 950bln end-September cash balance and sees the TGA peaking at USD 1.05tln, plus or minus USD 50bln, in late October (prev. USD 900bln end-June; prev. USD 1tln peak)


• Keeps quarterly buyback caps unchanged at up to USD 38bln for liquidity support and USD 25bln in the one-month to two-year bucket for cash management (exp. unchanged; prev. USD 38bln/USD 25bln)


• To sell USD 58bln of 3yr notes on August 11th, USD 42bln of 10yr notes on 12th August, and USD 25bln of 30yr on August 13th; all settling on August 17th

TBAC Minutes

• Dealers generally anticipate that nominal coupon auction sizes will next increase sometime in 2027, and expect Treasury to modify its forward guidance several quarters ahead of such a change. (prev. "early 2027))


• The consensus expectation of the primary dealers is that, over the long run, the SOMA portfolio will move toward holding only Treasury securities with a substantially shorter duration and a higher allocation to T-bills than current holdings.


• The Committee continues to believe that increases in coupon issuance could be warranted in FY2027 and discussed potential changes to the forward guidance for Treasury to consider.

Analysis details (13:42)

• Note that the statement vs the TBAC minutes differ ever so slightly on the potential future changes. As the statement says "changes" (prev. "increases"), while the TBAC minutes stick with the "increases" language.

Quarterly Refunding Summary : 

The Treasury maintained next quarter's coupon auction sizes, in line with both expectations and its prior guidance. Forward guidance was also left unchanged, with the Treasury continuing to anticipate "maintaining nominal coupon and FRN auction sizes for at least the next several quarters."

 Within the TBAC Minutes, dealers generally expect nominal coupon auction sizes to increase sometime in 2027 (prev. early 2027), while also anticipating the Treasury will adjust its forward guidance several quarters ahead of any such move. The Committee similarly continues to believe higher coupon issuance could be warranted during FY2027 and discussed potential changes to the Treasury's forward guidance for future consideration.

 Regarding TIPS, auction sizes were left unchanged, with the August 30-year reopening at USD 8bln, the September 10-year reopening at USD 19bln, and the October 5-year new issue at USD 26bln. FRN auction sizes were also maintained. 

Next week, the Treasury will offer USD 125bln of coupon securities to refund approximately USD 96.3bln of privately held notes and bonds maturing on 15th August, raising USD 28.7bln in new cash. The refunding will consist of USD 58bln of 3-year notes on Tuesday, USD 42bln of 10-year notes on Wednesday, and USD 25bln of 30-year bonds on Thursday. 

Regarding bills, the Treasury expects to maintain current benchmark bill auction sizes over the coming weeks and anticipates potentially issuing a short-dated Cash Management Bill (CMB) around the end of August to help meet cash management needs. It then expects to reduce short-dated bill auction sizes in September, before increasing auction sizes across the bill curve in October to accommodate seasonal fiscal outflows. The Treasury reiterated it will continue to evaluate near-term borrowing needs and adjust bill auction sizes as appropriate. 

The Treasury continues to assume a USD 950bln cash balance at the end of September but now expects the Treasury General Account (TGA) to peak at around USD 1.05tln (±USD 50bln) in late October, compared with the previous estimate of USD 1.0tln. 

Finally, the Treasury left its quarterly buyback caps unchanged, maintaining limits of up to USD 38bln for liquidity support and USD 25bln in the one-month to two-year bucket for cash management.

05 Aug 2026 - 13:30- ForexImportant- Source: US Treasury