(Aug 5): The US Treasury Department said on Wednesday that it will hold its coupon issuance and floating-rate note issuance steady “for at least the next several quarters".

It's a move likely to ease fears that an earlier-than-expected increase in longer-dated debt auctions could add pressure to yields already trading near multi-year highs.

Yields climbed as a renewed spike in oil prices reignited inflation concerns, while confusion over Federal Reserve policy following Federal Reserve Chairman Kevin Warsh's decision to pare back forward guidance has added further upward pressure.

The Treasury's announcement confirms analysts’ expectations that increases in auction sizes won't arrive until next year.

The Treasury said it will sell US$125 billion next week as part of its quarterly refunding. This will include US$58 billion in 3-year notes, US$42 billion in 10-year notes and US$25 billion in 30-year bonds.

It expects to keep current benchmark bill auction sizes unchanged in the coming weeks, while potentially issuing a short-dated cash management bill to address funding needs around the end of August.

Treasury said it anticipates trimming shorter-dated bill auction sizes during September, citing expected receipts tied to the mid-September corporate and non-withheld tax deadline.

The US government added that the cash balance in the Treasury General Account could peak at around US$1.05 trillion in late October. 

Uploaded by Lam Seng Fatt