Treasury Secretary Scott Bessent ordered release on May 6 of Treasury borrowing plans for the rest of 2026, as of now, and they constitute a doubling down on the risky strategy of nearly 30% “short coupon”; that is, borrowing much more new debt than normal in the form of Bills of one-year duration or less.
The Treasury has been doing this while waiting—now for 15 months—with the usual supreme Trump confidence, for general interest rates to go down; yet overall, during that period as a whole, they’ve gone up by about 0.5%, making short-term issuance more expensive, since it has constantly to be rolled over while adding still more debt. And of course, more speculative opportunity for hedge funds, which are making inroads which the Treasury itself calls “dramatically underreported” at 8% of the Treasury market.
