The Treasury Borrowing Advisory Committee recommended that the U.S. Department of the Treasury keep auction sizes for most of its securities unchanged this quarter. In a Nov. 4, 2026 report to the Secretary of the Treasury, the committee also said increases in coupon auction sizes will be warranted later in fiscal year 2027. Coupon securities are Treasury debt that pays interest.
The committee advises Treasury on how it borrows. Its recommendations are advice, and the report does not say when Treasury will announce its decisions. The report was signed by Chair Jason S. Granet and Vice Chair E. Alexander Schiller.
For the current quarter, the committee recommended leaving nominal coupon, floating-rate note (FRN) and Treasury Inflation-Protected Securities (TIPS) auction sizes as they are. It said current fiscal projections point to a widening funding gap over fiscal 2027 that grows further in fiscal 2028 and 2029. Members broadly agreed that coupon auction sizes should rise over that period, the report says. They debated at length how fast to raise them and by how much at the long end of the curve.
The committee said that, given current auction sizes, baseline projections suggest Treasury’s debt will shift toward a larger share of bills and shorter-term funding. It said the market has recently been absorbing Treasury issuance well. It also noted that money market fund assets have leveled off and that the bill market has started to show some signs of price sensitivity.
The report says Treasury markets have repriced toward a higher path for interest rates since the committee last met in early August. Two-year yields rose by roughly 50 basis points (half a percentage point) and ten-year yields by roughly 40 basis points. Ten-year yields peaked around 5.4% and thirty-year yields around 5.7% in early October, and some of that increase has since reversed.
The committee tied the rise to stronger economic activity, ongoing energy-supply disruptions and the Federal Reserve’s rate path. The report says the Fed raised its target range by 25 basis points to 3.75%–4.00% in September and held rates steady in October. Headline consumer price inflation reached 3.7% in September, and core inflation ran at 2.6%, according to the report.
The committee looked at borrowing by technology companies, including issuance related to what the report calls Super Intelligence, or SI. It said auction results show no evidence that 2026 technology-related issuance has crowded out demand for long-term Treasuries. It said the financing cycle is still in its early stages and recommended that Treasury keep monitoring the effects as SI-related issuance grows.
On Treasury derivatives, the committee said using futures and interest rate swaps to express exposure to Treasuries broadens market access and adds to demand. It listed policy options to boost demand for cash Treasuries. They include easing regulatory limits on bank balance sheets, expanding access to repo financing, improving the availability of term repo and enabling new entrants in repo market making. Repo is short-term borrowing backed by securities.
The committee said Treasury’s liquidity support buyback program, introduced in 2024, has supported market liquidity and remains an effective tool. It said any management of Treasury’s maturity profile should be done through changes to auction sizes. Members also recommended that Treasury change its forward-guidance language.
The committee closed by encouraging Congress to raise or suspend the debt limit. It said doing so would avoid disrupting Treasury market functioning, raising costs to taxpayers and constraining economic growth.