The Treasury Borrowing Advisory Committee held a meeting on October 29, 2024, at the Department of the Treasury. All members were present, along with Heather Masciotti from Citigroup to assist the Committee Chair. The meeting was attended by several Treasury officials including Under Secretary for Domestic Finance Nellie Liang and Fiscal Assistant Secretary David Lebryk.
Director Fred Pietrangeli reviewed fiscal year 2024 receipts and outlays. Receipts increased to $4.92 trillion, marking an 11% rise due to higher taxes and economic growth. Outlays also rose by 10% to $6.75 trillion, largely due to interest on public debt and Social Security adjustments.
Pietrangeli presented projections for privately-held net marketable borrowing, noting a median increase of $128 billion for FY2025-FY2026 compared to previous estimates. Dealers expressed uncertainty about future borrowing needs due to various economic factors.
Deputy Director Tom Katzenbach discussed expectations for coupon issuance, which remained unchanged since July. Dealers anticipated possible modest increases in late-2025 or 2026 but noted uncertainties regarding borrowing needs and debt limit suspension expiration.
Debt Manager Joshua Stachura summarized primary dealers’ views on TIPS market conditions, with most suggesting that the market could absorb additional supply despite reduced demand from retail investors.
Under Secretary Liang introduced new committee members Joe Demetrick, Sara Devereux, Greg Peters, and Scott Rofey. Debt Manager Nicholas Chisholm reviewed results of recent Treasury buybacks, noting positive dealer feedback but limited impact due to initial size constraints.
The Committee discussed efforts by the Inter-Agency Working Group on Treasury Market Surveillance (IAWG) to enhance market resilience. They noted improvements in liquidity metrics but highlighted challenges such as limited dealer capacity and increasing principal trading firm roles.
In a presentation on digital assets and their impact on the Treasury market, it was observed that stablecoin growth might have slightly increased demand for short-dated Treasuries. The potential benefits and risks of tokenizing Treasuries were discussed.
The Committee advised maintaining current auction sizes for nominal coupons and FRNs while recommending gradual increases for TIPS auctions.
After further discussions on market developments with Deputy Secretary Adeyemo, the meeting adjourned at 3:35 p.m., concluding with key elements of the Committee report summarized by the Chair.
