Goldman Sachs: The U.S. Treasury Department is expected to favor increasing the scale of short-term Treasury bond auctions.

On November 6, Goldman Sachs' William Marshall and Bill Zu indicated that the U.S. Treasury may lean towards increasing the auction size of shorter-term bonds in the future. They expect that the nominal auction sizes of two-year, three-year, five-year, and seven-year Treasury bonds will continue to increase, while the growth in floating rate notes will be smaller, and the auction sizes of ten-year, twenty-year, and thirty-year Treasury bonds will remain stable, with this trend expected to start in November 2026. They stated, “As time goes on, we anticipate this will lower the Weighted Average Maturity (WAM) and see a steady increase in the share of short-term Treasury bonds.” However, given that the Fed is expected to purchase about 50% of the net short-term Treasury supply over the next two years, the share of short-term Treasury bonds held by the private sector may remain roughly stable. (Jin10)