(Bloomberg) — Wall Street is widely expecting the US Treasury to announce a final increase to its sales of long-term debt this week, after a steady ramp up in supply that’s sometimes tested buyers’ appetites for funding a widening budget deficit.
The Treasury Department is expected on Wednesday to follow through on its November guidance of a third round of increases in its so-called quarterly refunding auctions of notes and bonds. That would put the total at $121 billion, not far from the record sizes during the Covid crisis.
With the Federal Reserve increasingly expected to slow or halt its reductions in holdings of Treasuries, US debt managers face the prospect of relief from having to tap the public for more of its financing needs. Nevertheless, the historically large budget gap means the era of giant auctions — some are at record sizes — is here to stay.
“In almost every scenario, the Treasury is going to have to keep…
