JPMorgan: U.S. Treasury Expected to Keep Auction-Size Guidance Unchanged

According to Jin10, JPMorgan interest-rate strategists expect the U.S. Treasury to leave its guidance for future auction sizes, nominal coupon Treasury auction sizes and buyback auction sizes unchanged in its November refunding announcement. They see a risk that the Treasury could reduce long-term debt issuance, although they said they see no reasonable rationale for doing so. The strategists said the Treasury should remove the word “at least” from its long-standing forward guidance. Its reluctance to adjust the guidance last quarter, along with specific adjustments made in August, suggests it is taking a more cautious, gradual approach.