(Nov 5): The US government borrowed a record $839 billion in a single week via its sales of Treasury bills and notes — both to repay holders of maturing debt and to raise the additional capital needed to finance the federal deficit.

Auctions of bills, floating-rate notes and Treasuries due in two, five and seven years conducted from Oct. 26-30 eclipsed the previous weekly record of $795 billion, set in the same period a year ago, according to Tony Farren, managing director in rates sales and trading at Mischler Financial Group.

The $839 billion is the sum of the 11 auction sizes, and the majority of it went to repay holders of maturing bills. Only $68 billion represented new borrowing by the US government, and it's not close to record levels. Those were set in March and April 2020, when auction sizes surged to finance pandemic response measures, and weekly net new cash peaked at levels around $350 billion.

Gross weekly debt totals vary widely depending mainly on how much debt is slated to mature. This week's record total underscores how the accumulated debt — and the rising cost of financing it — is driving the US government toward ever-larger auction sizes.

"Nothing good is coming from Treasury gross weekly issuance at a record high," Farren said. "The No. 1 risk is that people are going to demand higher yields."

Over the past two years, the Treasury Department has met growth in its borrowing need by increasing the size of its weekly bill auctions, while maintaining the sizes of its seven monthly auctions of notes and bonds with maturities ranging from two to 30 years.

That will have to change eventually — or else risk bills growing as a share of the total debt, which exposes US taxpayers to rising interest rates because bills mature more frequently. Since early 2024, the Treasury's quarterly policy statements have said it expects to keep auction sizes steady "for at least the next several quarters." Bond market strategists expect that guidance to change when the next statement is made on Nov. 4.

Uploaded by Siow Chen Ming