Treasury Plans to Increase Size of Debt Auctions

The Treasury Department said Wednesday it plans to adjust the size of its debt auctions beginning next month, in response to the Federal Reserve's moves to shrink the size of its bond portfolio as well as the fiscal outlook, which have increased the government's borrowing needs.

Treasury unveiled what it described as modest increases to its nominal coupon and two-year auction sizes beginning next month.

Over the next quarter, the Treasury Department expects to increase the sizes of its two- and three-year note auctions by $2 billion a month, or a total of $6 billion by the end of the first quarter. It also said it would increase the size of its floating rate note auction by $2 billion in February.

Treasury also plans to boost the auction sizes of its five-, seven- and 10-year notes, as well as its 30-year bond auctions, by $1 billion each starting next month. TIPS auction sizes will remain unchanged, it said.

Treasury also said Wednesday it expects it can continue to pay the government's bills "through the end of February," but urged Congress to act promptly to lift the federal borrowing limit. The agency has been deploying extraordinary measures since Dec. 8 when the last suspension of the debt limit expired.

Write to Kate Davidson at kate.davidson@wsj.com

(END) Dow Jones Newswires

January 31, 2018 09:39 ET (14:39 GMT)