The US Treasury Department has revised the treasury notes and bond bidding guidelines that have been used since the beginning of 2024, which may open the door to reducing the issuance of longest-term debt in 2027. “Based on current estimated borrowing requirements, the Ministry of Finance is expected to maintain the bid sales scale for nominal coupon bonds and FRN in the next few quarters,” the Ministry of Finance said in a statement on Wednesday. FRN refers to a variable interest rate note. Officials for more than two years ago said “at least” that there would be no change for a few quarters. Removing the qualifying phrase “at least” means that the US Treasury may consider reducing the issuance of long-term treasury bonds as early as 2027. The statement said it will “engage with various market participants to better understand the supply and demand dynamics of US Treasury bonds.” Most brokers have anticipated that the Treasury Department will make some kind of adjustment to the guidelines as Minister Scott Bessent's latest measure to curb this year's sharp rise in long-term bond yields. He had previously unexpectedly expanded the scale of long-term debt repurchases, and this move is only two weeks since the announcement of the repurchase schedule in August. However, the move failed to stop yields from rising, and 30-year Treasury yields surged to their highest level since 2002 last month. Market participants have mixed opinions on the possible impact of Wednesday's statement, with some believing that there won't be much change after yields fall back from October highs.

The US Treasury Department has revised the treasury notes and bond bidding guidelines that have been used since the beginning of 2024, which may open the door to reducing the issuance of longest-term debt in 2027. “Based on current estimated borrowing requirements, the Ministry of Finance is expected to maintain the bid sales scale for nominal coupon bonds and FRN in the next few quarters,” the Ministry of Finance said in a statement on Wednesday. FRN refers to a variable interest rate note. Officials for more than two years ago said “at least” that there would be no change for a few quarters. Removing the qualifying phrase “at least” means that the US Treasury may consider reducing the issuance of long-term treasury bonds as early as 2027. The statement said it will “engage with various market participants to better understand the supply and demand dynamics of US Treasury bonds.” Most brokers have anticipated that the Treasury Department will make some kind of adjustment to the guidelines as Minister Scott Bessent's latest measure to curb this year's sharp rise in long-term bond yields. He had previously unexpectedly expanded the scale of long-term debt repurchases, and this move is only two weeks since the announcement of the repurchase schedule in August. However, the move failed to stop yields from rising, and 30-year Treasury yields surged to their highest level since 2002 last month. Market participants have mixed opinions on the possible impact of Wednesday's statement, with some believing that there won't be much change after yields fall back from October highs.