Goldman Sachs: U.S. Treasury Expected to Lean Towards Increasing Short-Term Treasury Bill Auction Size

On November 6th, William Marshall and Bill Zu of Goldman Sachs stated that in the future, the increase in the auction size of US Treasury bonds may tend to be towards shorter-term bonds. They anticipate that the auction sizes of nominal 2-year, 3-year, 5-year, and 7-year bonds will continuously rise, while the increase for floating rate notes will be relatively smaller, and the auction sizes of 10-year, 20-year, and 30-year bonds will remain unchanged. They expect this trend to commence in November 2026. They further stated: "Over a period of time, we anticipate that this will lead to a lowering of the weighted average maturity (WAM) and witness a steady growth in the proportion of short-term bonds." However, considering the Fed's expectation to purchase approximately 50% of the net short-term bond supply over the next two years, the proportion of short-term bonds held by the private sector may remain relatively steady. (FX678)