US Treasury Makes History: $100 Billion Single Auction!

The US government plans to raise $100 billion through a single short-term Treasury bill auction this week—an unprecedented amount that highlights both its massive financing needs and tests investor appetite for short-term debt.

According to Tuesday's announcement from the US Treasury, it will auction $100 billion in 4-week bills on Thursday, setting a new record for any single Treasury auction—$5 billion more than last week's offering.

The Treasury has been increasing auction sizes to rebuild cash reserves since the debt ceiling was raised in early July. This massive scale may also signal further expansions to help cover the growing federal budget deficit.

As reported last week, the Treasury's refunding announcement indicated plans to issue more short-term debt to address widening deficits—continuing policies from former Treasury Secretary Yellen’s tenure.

Treasury Secretary Besant noted in June that longer-term yields were too high to justify increasing those debt sales.

"This increase is just the beginning as the Treasury prioritizes bill issuance over coming quarters and years," said Gennadiy Goldberg, TD Securities’ US rates strategist. "While markets focus on size now, T-bill auction amounts will likely keep growing."

For context, this 4-week bill auction alone equals over 25% of the UK’s total bond sales for fiscal 2024-2025.

The latest 4-week bill increase follows last week’s $5 billion boost to 6-week bills—auctioned Tuesday. The Treasury will also sell $65 billion in 17-week bills Wednesday and $85 billion in 8-week bills Thursday, with both amounts unchanged.

For longer maturities, the US will issue $125 billion in coupon-bearing debt: $58 billion in 3-year notes (auctioned Tuesday), $42 billion in 10-year notes (Wednesday), and $25 billion in 30-year bonds (Thursday).