After the Democrats swept the US midterm elections, a divided government may help restrain future Treasury borrowing and prevent fresh deficit blowouts, though it will not necessarily bring down elevated bond yields, analysts say.
The US Treasury Department unveiled its quarterly refunding statement on Wednesday, with market participants describing the overall borrowing outlook as largely neutral.
Based on its projected financing needs, the Treasury said it expected to keep note and bond auction sizes unchanged “for the next several quarters”. It maintained the size of its 30-year bond auction at US$25 billion, in line with the May and August quarterly refunding rounds.