The Treasury’s 20-year auction on Wednesday raised $13 billion at a 5.469% yield, the highest at a 20-year auction since 1986. The Treasury may reduce or end 20-year bond sales as it weighs borrowing costs and debt issuance plans.
Yields on 10-year and 30-year Treasuries earlier this month reached 5.36% and 5.66%, their highest levels since 2002. US federal debt has passed $40 trillion, and the fiscal 2026 interest bill reached a record $1.36 trillion, equal to 3.2% of GDP.
The article says shifting borrowing toward shorter-term debt, where rates are lower, could reduce average borrowing costs, but would expose the government to more frequent refinancing and rollover risk. The share of US public debt in Treasury bills, which mature in one year or less, is around 22%, up from around 15% five years ago. Treasury increased planned buybacks of longer-dated debt from $2 billion to $6 billion, but failed to purchase the full amount in the first two rounds in September.
Citi strategists expect 20-year and 30-year auction sizes to be reduced by $3 billion, with additional bill issuance filling the gap. Treasury could instead keep auction sizes unchanged while signaling future adjustments, or retain the status quo. JPMorgan analysts say it would not be prudent to discontinue a bond that raises $168 billion a year. Treasury is due to unveil its quarterly refunding plans in the first week of November.
