US Treasury to Cut Long-Term Debt Sales Amid Rising Yields

Why the US Treasury Is Shrinking Its Long-Term Debt Sales

The US Treasury is expected to cut $3 billion from each 20-year and 30-year bond auction and borrow more through short-term bills instead. Citi said the 20-year bond could even be canceled, with an announcement expected November 4. The Treasury has not confirmed any change. Bills cost less today, but they mature within a year, so the government must refinance them far more often at whatever rate investors demand.

Long-Term Borrowing Costs Sit Near Multi-Decade Highs

Long-term borrowing costs sit near multi-decade highs. The 10-year yield closed at 5.24% on October 9 and the 30-year at 5.60%, according to Treasury data. 10 and 30 Year US Treasury Yields. Source: TradingView

Implications for Crypto Markets

Crypto traders have felt the yield climb already. Bitcoin (BTC) cooled when the 10-year hit its 2002-level high and now trades at $84,030, up 1.2% in 24 hours, moved by US President Trump’s latest remarks. The next signal arrives with a Treasury survey of bond dealers next week. The November 4 refunding statement will then show whether Washington borrows shorter, and how long-term yields respond.

Experts Weigh In

BNP Paribas strategists doubt the shift would lower government borrowing costs. Kevin Flanagan, head of investment strategy at WisdomTree, questioned the math in August. “It seems to me mathematically very difficult to cut issuance at the longer end of the curve and make it up elsewhere,” Bloomberg reported, citing Flanagan.