The Treasury Borrowing Advisory Committee (TBAC) gathered at the U.S. Department of the Treasury on April 29, 2025, for a private meeting. All members were present, joined by Allison Weed from Citigroup, Acting Assistant Secretary for Financial Markets Brian Smith, and multiple other Treasury staff and representatives from the Federal Reserve Bank of New York.
The agenda included reviewing fiscal projections and examining the current financial landscape. Director Fred Pietrangeli reported that receipts for Q2 FY2025 reached $2.260 trillion, increasing by 3% due to wage and employment growth, while outlays rose by 10% to total $3.567 trillion, driven by higher interest costs and defense spending.
Pietrangeli discussed borrowing needs and auction sizes, noting that while current levels meet borrowing needs for FY2025, larger gaps are predicted for FY2026. There was also uncertainty regarding future needs because of economic factors.
Deputy Director Tom Katzenbach reported that primary dealers expect no change in nominal coupon issuance at the upcoming May refunding but predict increases in auction sizes in 2026. Changes to Treasury Inflation-Protected Securities were noted, with modest increases expected for June and July issues.
Debt Manager Joshua Stachura reviewed proposed changes to the 20-year bond auction schedule to address repo market inefficiencies, while Debt Manager Nicholas Chisholm discussed stablecoin implications on Treasury security demand.
In discussions on market developments, the Committee noted increased trading activities and stable conditions despite market volatility. The effects of the debt limit on financial markets were probed, and concerns about increased costs and risks were expressed. The Committee favored delegating borrowing authority to the Administration.
Interest-bearing stablecoins were analyzed for their potential effects on Treasury demand and financial systems, with discussions considering their benefits and risks.
The Committee remained consistent in its financing recommendations, suggesting stable nominal coupon and FRN auction sizes with increases in TIPS offerings. Key recommendations and market analyses were summarized for Secretary Bessent.
The meeting was adjourned with formal documentation signed by Acting Assistant Secretary Brian Smith and Committee Chair Deirdre Dunn.
