The SIFMA Quarterly Issuance Survey forecasts total net Treasury bill, note, and bond issuance to be $166.0 billion in the fourth quarter of 2015, 24.9 percent higher than the $132.9 billion issued in 3Q’15 (actuals include cash management balances). SIFMA’s forecast for the fourth quarter issuance of net marketable debt is much lower than Treasury’s August debt issuance estimate of $270.0 billion. The net bill redemption in 4Q’15 is expected to be $30.0 billion compared to the $37.0 billion redeemed during the third quarter, while the net issuance of coupons is expected to be $196.0 billion, a 15.4 percent increase from $169.8 billion issued in the previous quarter.

The SIFMA Government Issuance and Rates Forecast survey respondents forecast benchmark yields to continue gradually increasing across all maturities through the end of 2015 and in the first quarter of 2016. The 2-year Treasury yields are expected to increase to 0.83 percent by December 2015 and further to 0.95 percent by March 2016. Five-year yields are projected to increase to 1.63 percent and then increase to 1.73 in 1Q’16. Similarly, for 10-year maturities, survey responders expect a gradual increase to 2.23 percent and 2.28 percent at the end of December and march, respectively, while 30-year yields are expected to increase to 2.95 percent and further to 2.98 in 1Q’16.

About the Report

A quarterly survey of SIFMA’s Primary Dealers and Government Securities Research and Strategist Committees concerning U.S. government issuance and rates forecasts. The committees are composed of trading strategists and research analysts at SIFMA member firms who specialize in the U.S. government and agency securities markets. The survey is intended to provide market participants with the current consensus expectations and median forecasts of many of the primary dealers and other firms active in the U.S. government and agency securities markets.

Credits

SIFMA Capital Markets

• Staff Advisor: Rob Toomey

SIFMA Research

• Senior Associate: Justyna Podziemska