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The numbers: The U.S.Treasury announced Wednesday it will auction $84 billion in notes and bonds next week in its quarterly refunding auctions, unchanged from the previous auction in May. Treasury also said it plans to increase the supply of short-term bills, once the recent budget deal reached by the White House and Congress is signed into law.
What happened: The department will auction $38 billion in 3-year notes TMUBMUSD03Y, -0.90% on Aug. 6 and $27 billion in 10-year notes TMUBMUSD10Y, -0.09% on Aug. 7. The government will also sell $19 billion in 30-year bonds TMUBMUSD30Y, +0.00% on Aug. 8.
The offerings will refund about $57.3 billion of Treasury notes and other government paper and will raise $26.7 billion in cash.
Big picture: The government has been constrained by the debt ceiling since early March and has been using “extraordinary measures” to keep funding activities. Congress and the White House have reached a two-year budget agreement that suspends the debt ceiling until July 2021. The House has approved the plan but the Senate has yet to act on the measure. Once the deal is signed into law, Treasury said it will increase the issuance of short-term bills in order to boost its cash reserves. Overall, the government has said it expects to borrow over $1 trillion for the second straight year.
Market reaction: The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.09% edged back to 2.055% from 2.063% late Tuesday.
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