Minutes of the Meeting of the Treasury Borrowing Advisory Committee August 4, 2026

The Committee convened in a closed session at the Department of the Treasury at 8:45 a.m.  All members except Sara Devereux were present.  Denise Rosenhaft Gray from BNY was also present to assist the Committee Chair. Counselor to the Secretary Hunter McMaster, Deputy Assistant Secretary for Federal Finance Brian Smith, Director of the Office of Debt Management Fred Pietrangeli, and Deputy Director of the Office of Debt Management Tom Katzenbach welcomed the Committee.  Other members of Treasury staff present were Abigail Brown, Chris Cameron, Dave Chung, Gabriella Csepe, Robert Dunsky, Ethan Fallang, Gary Grippo, Liang Jensen, Gavin Ross, Alessio Saretto, Joshua Stachura, Nick Steele, and Renee Tang.  Federal Reserve Bank of New York staff members Ellen Correia Golay, Oliver Giannotti, and Kyle Watson were also present. 

Deputy Assistant Secretary Smith opened the meeting by thanking Jason Granet and Alex Schiller for their willingness to serve as Chair and Vice Chair of the Committee, respectively.  He also thanked outgoing members Lew Alexander and Chris Leonard for their service to the Committee, welcomed Michael Stanley as the newest member of the Committee, and summarized recent debt management developments. 

Director of the Office of Fiscal Projections Steele highlighted changes in receipts and outlays through Q3 FY2026.  Within receipts, Steele cited a $55 billion net increase in customs deposits, adjusting for tariff refunds, as well as a $112 billion (4%) increase in withheld and an $89 billion (9%) increase in non-withheld taxes.  In terms of outlays, Steele noted that the largest increase occurred at the Department of Treasury, which rose by $120 billion (10%), due to higher gross interest resulting from higher levels of debt. Meanwhile, a group of other outlays fell by -$112 billion (-20%) in part due to a reduction in disbursements by the Environmental Protection Agency, the Federal Emergency Management Agency, and the Department of Commerce.

Director Pietrangeli then turned to deficit and privately-held net marketable borrowing projections, noting that the median primary dealer’s aggregate FY2026-28 privately-held net marketable borrowing estimate was nearly unchanged since last quarter’s Committee meeting.  He noted that, while current issuance sizes are adequate to cover expected borrowing needs for the remainder of FY2026, the median primary dealer forecast for privately-held net marketable borrowing implies a $1.45 trillion funding shortfall in FY2027-28 based on current coupon auction sizes and privately-held bill supply.

Debt Manager Ross reviewed primary dealers’ expectations for coupon issuance.  The consensus remains that current coupon auction sizes leave Treasury well-positioned to meet its projected financing needs through FY2026, with changes in Treasury bill supply likely being adequate to address any changes.  Dealers generally anticipate that nominal coupon auction sizes will next increase sometime in 2027, and expect Treasury to modify its forward guidance several quarters ahead of such a change.

Debt Manager Jensen next summarized primary dealers’ expectations regarding the path of reserve management purchases and the long-term composition of the Federal Reserve System Open Market Account (SOMA).  Most dealers expect the ample-reserves regime to persist, but they cited uncertainty around the outcome of the Federal Reserve’s balance sheet task force and potential regulatory reforms as factors to consider.  Overall, while dealers have differing opinions on the pattern of reserve management purchases over the next year, there is greater agreement on the broader direction.  The consensus expectation of the primary dealers is that, over the long run, the SOMA portfolio will move toward holding only Treasury securities with a substantially shorter duration and a higher allocation to T-bills than current holdings. 

Senior Debt Manager Stachura then reviewed primary dealer feedback on the balance sheet implications of a potential change to the 7-year note issuance cycle, whereby Treasury would move to quarterly new issues (with two reopenings) rather than issuing a new 7-year note each month.  Most dealers expressed little to no balance sheet concerns about the possibility of scheduling the quarterly new issue auction just ahead of the end of each calendar quarter.  TBAC members had no additional feedback, noting the Committee’s May 2023 presentation on this topic.

Deputy Director Katzenbach next relayed primary dealers’ thoughts on investing excess cash in the overnight Treasury repo market and whether it would be better for the federal government’s typical cash flow volatility to reside in the Treasury General Account or in repo investments.  A plurality of primary dealers prefers a stable repo investment allocation, but views are mixed overall.  Some respondents argued that a consistent investable repo balance might command a premium and that counterparties would be less likely to bid aggressively for Treasury’s investable cash if much of that liquidity were withdrawn periodically.  Although day-to-day variability of $25-50 billion is generally perceived to be manageable, respondents uniformly suggested that advance guidance around Treasury’s planned repo activity would be instrumental to the potential program’s success.  Most primary dealers are optimistic that such a program, if designed well, would at least modestly ease funding constraints, increase intermediation capacity, and thereby improve the market’s ability to absorb additional Treasury securities.

The Committee then discussed the first charge, which addressed transparency of secondary market transactions in Treasury securities.  The presenter stressed that several factors, including expanded electronification, the Treasury buyback program, and trade dissemination by FINRA, have contributed to a reduction in transaction costs and improved market resilience.  Looking ahead, the presenter suggested that incremental expansion of transparency efforts should focus on enhanced dissemination for T-bills and shortening the lag for dissemination of trades in on-the-run securities.  Conversely, the presenter emphasized that off-the-run nominals and Treasury Inflation-Protected Securities (TIPS) trade less frequently and with spikes in activity around certain market events, increasing risks to dissemination.  The presenter suggested further consideration of additional transparency for securities that are the cheapest-to-deliver against a futures contract.  Overall, the Committee recommended continued caution in incrementally expanding transparency.

The Committee next discussed the second charge, which evaluated the growth of intraday repo and its implications for money markets, collateral arrangements, and the Treasury market as a whole.  The presenter concluded that intraday repo could create a new channel for cash lenders to deploy idle balances, improve the efficiency of liquidity distribution, and reduce liquidity bottlenecks and the risk of funding squeezes.  However, greater reliance on intraday repo could also introduce new risks to market functioning, particularly during times of stress.  Committee members highlighted frictions in managing intraday liquidity needs under the current market structure.  The Committee discussed how blockchain technology and/or increased usage of the Federal Reserve’s daylight overdraft facility could improve intraday liquidity.  However, members agreed that potential ramifications for reserve demand, funding rates, and Treasury securities trading require further consideration.

The Committee adjourned at 11:45 a.m. for lunch.

The Committee reconvened at 1:00 p.m. 

Finally, the Committee turned to its financing recommendation for the upcoming quarters and unanimously recommended that Treasury maintain nominal coupon, floating rate note, and TIPS auction sizes at current levels.  The Committee continues to believe that increases in coupon issuance could be warranted in FY2027 and discussed potential changes to the forward guidance for Treasury to consider.

The Committee adjourned at 1:45 p.m.

The Committee reconvened at 3:15 p.m.

The Chair summarized key elements of the Committee report for Secretary Bessent and followed with a discussion of recent market developments. 

The Committee adjourned at 4:00 p.m.

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Brian Smith

Deputy Assistant Secretary for Federal Finance 

United States Department of the Treasury

Certified by:

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Jason Granet, Chair

Treasury Borrowing Advisory Committee

August 4, 2026

Taking into consideration Treasury's short, intermediate, and long-term financing requirements, as well as the variability in financing needs from quarter to quarter, what changes, if any, do you recommend to Treasury issuance?  Please also provide perspectives regarding market expectations for Treasury issuance, the effects of changes in SOMA holdings, the evolution of Treasury holdings by different types of investors, as well as auction calendar construction.

Since 2020, the Interagency Working Group on Treasury Market Surveillance has worked with FINRA to provide greater transparency in the secondary market as a means of enhancing the overall resilience of the Treasury market. What additional incremental steps should Treasury consider towards additional transparency of secondary market transactions?

FINRA began publishing Weekly Aggregate Statistics on Treasury market activity in 2020, which were converted to Daily Aggregate Statistics in 2023.  Should the Daily Aggregate Statistics provide additional granularity about transaction volumes?  For example, would it be beneficial for the Daily Aggregate Statistics to include additional breakdowns of activity within the current “Bills” category or on additional categories of off-the-run transactions for nominal coupons (not at the individual CUSIP level, but instead broad categories of near off-the-run vs. far off-the-run)?

FINRA began disseminating transaction-level data on transactions in on-the-run Treasury securities in 2024.  How, if at all, has such publication affected Treasury market liquidity?  Should the publication of transaction-level data be expanded or enhanced?  For example, would it be beneficial to disseminate transaction-level data for bills or near off-the-runs?  Would disseminating data one hour after a trade be of greater benefit than the current end-of-day publication of data? 

How would such changes balance the generally accepted benefits of market transparency with potential concerns about the effects on liquidity provision?  Are there other ways to further enhance transparency or address such concerns? 

Please comment on the growth of intraday repo and its implications for money markets, collateral arrangements, and the Treasury market as a whole.  Which market participants are likely to use intraday repo and why?  What effects could intraday repo have on liquidity management practices?  How might greater use of intraday repo affect investors with persistent collateral financing needs?  How dependent is intraday repo on structural changes to the market – e.g., greater adoption of blockchain and tokenization technology?

We would like the Committee’s advice on the following: