US Treasury increases long-term debt sales as deficit grows

Treasury increases auction sizes, to launch 2-month bill

• Treasury says it plans to lift auction sizes of all nominal coupon debt
• Will keep TIPS auctions unchanged
• Plans to introduce 2-month bill sale
• This is the second consecutive quarterly rise in debt sales after a long-term downtrend starting in 2009
• Will sell $31B in 3-year notes compared to $30 billion last month and $26B in Feb
• The 10-year note size will rise to $25 billion from $24 billion
• 30-year to $17 billion from $16 billion

The Treasury will sell $73 billion this quarter in long-term debt. Expect issuance to continually rise.

In turn, the bond market is going to continue to push yields higher.