The United States will gradually cut back the size of two- and three-year note auctions over the next three months to reflect a better budget outlook, the U.S. Treasury said on Wednesday.
In a statement, Treasury Deputy Assistant Secretary for Federal Finance James Clark said the reductions would begin with the November three-year note auction announced on Wednesday.
"The magnitude and duration of the offering-size reductions will depend on the pace and extent of the fiscal improvement," he said.
A Treasury official said the reductions would probably be in line with recent cuts, of about $1 billion per month in each security.
"I expect it's going to follow much the same pattern as recent coupon reductions that we have had, so that's a billion per month for the next three months," he said.
That would equate to an annualized $66 billion reduction in total issuance if the reductions stopped after three months, the official said.