Dealers Expect Treasury to Shift Toward More Short-Term Debt Issuance

The Treasury is expected to make its largest change to debt-issuance guidance since early 2024 in its November 4 quarterly statement, with many Wall Street dealers anticipating fewer 20- and 30-year bonds and more short-term bills and notes. The shift would respond to elevated long-term yields and Treasury Secretary Scott Bessent’s stated willingness to use debt-management tools to ease pressure on the bond market, though some analysts argue that buybacks are too small to make a meaningful difference. JPMorgan strategists, by contrast, expect auction-size guidance and buyback plans to remain unchanged, while acknowledging the possibility of reduced long-term issuance. The debate comes as investors face duration risk: long-term yields can rise even when the Federal Reserve cuts rates, because inflation uncertainty, Treasury supply and the premium investors demand for holding longer-maturity debt also shape yields.