Citi Predicts Bessent May Cut Long-Term U.S. Bond Auctions, Possibly Scrapping 20-Year Issuance

Deep News10-10 07:10

Citigroup believes U.S. Treasury Secretary Scott Bessent may reduce the size of long-term government bond auctions, and could even eliminate 20-year maturity issuance entirely.

The bank's head of U.S. rates strategy, Jason Williams, said the baseline expectation is that both 20-year and 30-year bond auctions will be reduced by $3 billion each time, with the funds raised through increased Treasury bill issuance.

He expects the Treasury to announce this at its next quarterly refunding announcement on November 4.

In a report late Friday, Citigroup strategists advised clients to position for 20-year bonds to outperform 10-year notes, preparing for "a reduction or cancellation of 20-year issuance."

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