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| 02 May, 2018

U.S. Treasury plans bigger debt auctions, sales of 2-month bills

The U.S. federal government will increase the size of its debt auctions in the coming months.

WASHINGTON- The U.S. federal government will increase the size of its debt auctions in the coming months to raise more money as the Federal Reserve reduces its public debt purchases, U.S. Treasury Department officials said on Wednesday.

Officials also said the government would begin selling 2-month Treasury bills later this year and was studying the possibility of adding an additional sale of 5-year TIPS securities, which are tied to the rate of inflation.

The increase in auction sizes will happen over the next three months and will include sales of notes and bonds with fixed-rate maturities between two and 30 years, as well as 2-year floating rate notes, Deputy Assistant Secretary for Financial Markets Clay Berry said in a statement.

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The Treasury increased auction sizes in February in order to respond to increased borrowing needs as the U.S. central bank has continued to wind down its bond holdings built up during a multi-year economic stimulus program and due to changes in the fiscal outlook.

A second Treasury official said the same reasons applied for the planned increase in auction sizes over the coming months.

(Reporting by Jason Lange; Editing by Andrea Ricci) ((jason.lange@thomsonreuters.com; +1 202 310 5487; Twitter @langejason; Reuters Messaging: jason.lange.thomsonreuters.com@reuters.net))