US Treasury yields fell on Wednesday after the Treasury’s quarterly refunding statement kept nominal coupon and floating rate auction sizes unchanged for the next several quarters. The 10 year note yield fell 5.8 basis points to 4.89 percent, the 5 year fell 5.4 basis points to 4.69 percent and the 30 year bond fell 4.2 basis points to 5.28 percent, reversing the previous morning’s rise into the announcement.
The refunding itself is $125 billion next week: $58 billion of 3 year notes on November 9, $42 billion of 10 year notes on November 10 and $25 billion of 30 year bonds on November 12, refunding about $97 billion maturing on November 15 and raising roughly $28 billion of new cash.
Two elements of the package leaned against long end supply pressure. The tentative buyback schedule for the coming quarter anticipates up to $70 billion of liquidity support purchases across off the run buckets plus up to $25 billion of cash management purchases in the 1 month to 2 year bucket. The Treasury Borrowing Advisory Committee nonetheless told the Secretary that coupon increases will be warranted later in fiscal 2027, so Wednesday’s relief is about this quarter’s calendar, not the medium term funding path.