US Treasury Sold $524B in Securities This Week; Inflation Set to Surpass T-Bill Yields

The US government sold $524 billion in Treasury securities this week across eight auctions, including $480 billion in Treasury bills and $44 billion in notes and bonds. The Treasury General Account (TGA) has swelled to over $1 trillion due to Tax Day cash inflows, the highest since April 2021. In response, the Treasury Department trimmed T-bill issuance by $35 billion compared to March, causing overall debt to dip below $39 trillion. The 10-year yield rose to 4.31% and the 30-year yield to 4.91%. Inflation measures like the PCE price index (near 3.0% year-over-year through February) and the Price Index for Gross Domestic Purchases (3.1% year-over-year in Q4) are already above T-bill yields, with March data expected to spike due to fuel prices. The 6-month T-bill yield (3.71%) is above the Effective Federal Funds Rate (3.64%), indicating no rate cuts expected in six months. The Treasury also sold $15 billion in 20-year bonds at a yield of 4.88%, adding to long-term debt as no 20-year bonds mature until 2040.