- Annual forecasts range from $116 billion to $192 billion
- Some strategists say 10- and 30-year could face steep cuts
Taken by surprise by the U.S. Treasury’s plan to resume selling 20-year bonds, Wall Street dealers now have to guess how much of the debt to expect and the implications for existing maturities.
Figuring out how the new 20-year year will fit into the current framework is no mean feat, and getting it right is important — the department’s decision on the matter could roil valuations across all maturities.
“Supply matters because it changes the shape of the curve,” said Bryce Doty, head of the taxable bond group at Sit Investment Associates Inc. in Minneapolis. “That uncertainty is going to add volatility.”