Treasury Secretary Scott Bessent to Cut Long-Dated Bond Auctions

U.S. Treasury Secretary Scott Bessent is expected to reduce the auction sizes for long-dated government bonds as part of a strategy to manage yields that are currently near multi-decade highs. According to Citigroup Inc., the Treasury Department will likely cut auction sizes for both 20- and 30-year bonds by $3 billion each, with the possibility that 20-year debt sales could be canceled entirely.

These reductions would be offset by an increase in T-bill issuance. The Treasury Department is expected to formally announce these changes during its quarterly refunding announcement on November 4.

Market reactions to the projected shift are mixed. Citigroup suggests the move could serve as a bullish catalyst for 20-year bonds. However, strategists at BNP Paribas SA expressed skepticism, questioning whether reducing the size of long-term bond sales would effectively lower the overall borrowing costs for the government.