US Treasury to Auction $112B in Debt, Increase Future Auction Sizes Amid Rising National Debt and Interest Rates

Treasury Department aims to cover national deficit through bond auctions, increased auction sizes planned for 2-, 5-, 3-, and 7-year auctions through January, as Federal Reserve's anti-inflation push heightens government debt service costs.

The US Treasury Department plans to finance the nation's $1.7 trillion deficit partially by auctioning off $112 billion worth of debt and increasing upcoming auction sizes of 2-, 3-, 5-, and 7-year securities.
The Treasury aims to raise $9.8 billion from the auction to refund approximately $102.2 billion of notes set to mature on November 15.
Due to rising interest rates, the cost of debt service for the federal government has increased, even as the Federal Reserve continues its campaign to combat inflation.
The increases in 2-, 5-, 3- and 7-year auction sizes would total $9 billion, $9 billion, $6 billion, and $3 billion respectively by the end of January 2024.
Treasury yields moved lower after the announcement, signaling a potential reduction in borrowing costs across various loan types.
The Treasury Department anticipates a need for further increases next quarter but does not foresee additional increases beyond that timeframe.