US TSYS/SUPPLY: TBAC Less Sure About Guidance Changes, Given Volatile Backdrop

 The Treasury's advisory committee (TBAC) appeared to be less convinced this quarter that guidance on future issuance should be changed, apparently because of the recent volatility in Treasury market uncertainty amid an uncertain backdrop: "members were mixed on the value of the forward guidance language. Some members preferred dropping the language altogether, while others felt a shift in the language might be received poorly in light of the meaningful increase in uncertainty around tariffs and the economic outlook."

• In the previous quarter's refunding, TBAC "uniformly encouraged Treasury to consider removing or modifying the forward guidance on nominal coupon and FRN auction sizes that has been in the refunding statement for the past four quarters. Some members preferred dropping the language altogether to reflect the uncertain outlook, though the majority preferred moderating the language at this meeting."
• It may be that the guidance ("anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters") has outlived its usefulness, but that Treasury will refrain from changing this communication ecause of market sensitivities to any changes.