Monday, November 6, 2023

Treasury Financing Schedule

 I find this interesting for some reason.  First, realize that the Treasury distinguishes between "bills" which have a duration from 4 to 52 weeks and financial instruments which are longer than one year, including "notes" (which are 2,3,5,7 or 10 years), "bonds" (which are 20 or 30 year), "FRNs", floating rate notes (which are usually 2 years), and "TIPS" - Treasury Interest Protected Securities, which are usually 5 years.

Excluding the bills, these are the auction dates:

4th quarter of 2023: 11/15 ($114 bn) , 11/24 ($24bn), 11/30 ($180 bn), 12/15 ($110 bn), 12/29 ($44 bn)

1st quarter of 2024:  1/2/24 ($168 bn), 1/16/24 ($122 bn), 1/31/24 ($220 bn), 2/15/24 ($125 bn), 2/23/24 ($26 bn), 2/29/24 ($195 bn), 3/15/24 ($121 bn), 3/28/24 ($16 bn)

You could look at these schedule and project them to the end of the fiscal year and probably be correct.  They are pretty predictable.

About 2/3 of the money raised will go towards paying off maturing debt.  But this still doesn't explain what they need all of the money for.  They have already increased the balance of the Treasury checking account at the Fed, they are using a lot of money to pay off maturing notes and bonds, they will be financing deficit spending, and there still a lot more money that that they are raising that they haven't explained.  Where will it go? A) to increase the balance of the checking account even more, B) to cover deficit spending including interest, which is higher than anticipated, or C) some other reason they haven't explained.  My guess is B, that the deficit will be higher than anticipated, but we will see.

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