MNI UST Issuance Deep Dive: Sep 2023

EXECUTIVE SUMMARY:

• Treasury's August refunding announcement showed expected auction sizes for the current quarter that were largely in line with our / market expectations, though on the high side for 2Y and 5Y coupons. We update our expectations accordingly.
• Following the refunding announcement, all analysts whose reactions we had seen unsurprisingly raised their outlooks for Treasury supply amounts over the coming year.
• ·Expectations have shifted from nominal monthly coupon issuance peaking in the high $200Bs, to somewhere in the $300-350B area, by mid-2024.
• That's a big increase in the supply seen in refunding months from the $231B seen in the last 3 (including May), and $197B pre-pandemic (Feb '20).
• At the higher end of the range, that would compare with the nominal coupon supply seen during the pandemic-related deficit spending in 2021 ($336B).

Please see PDF for full analysis:

MNI_US_DeepDive_Issuance_2023_09.pdf

Source: Treasury, MNI