❮ Return to Blog

Funding America: Understanding the Treasury’s Strategy

Funding America: Understanding the Treasury’s Strategy

Estimated reading time: 0 minutes

Treasury Takes the Wheel

It’s a big week for market-relevant decisions coming out of Washington. For one, there’s the Federal Reserve’s interest rate decision later today. But that’s not all. Another event is drawing more eyes than usual.The Treasury Department is set to unveil its funding strategy. With the Treasury yields at their highest level since the Global Financial Crisis, and the budget deficit widening, the Treasury’s borrowing plan is taking on particular significance.

The Fiscal Forecast

The Treasury announced Monday that it anticipates borrowing $776 billion in the last quarter of 2023, and $816 billion in between January and March 2024. But details of the new debt pile, including auction sizes, and whether the government will amp up its sales of longer-dated debt at the current high interest rates, are still up in the air. And the markets are eager to know more.

Refinancing Ripples

All of this is happening against the backdrop of higher interest rates.

Even though the Fed might be nearing the end of its rate hiking campaign, it has guided that rates will likely be higher for longer. That has led to a sell-off in longer-term Treasuries, propelling yields to their highest level since 2007, and implying higher borrowing costs for both consumers, and the government.

At the same time, the budget deficit is expected to increase by roughly $320 billion this fiscal year, due to both inflation and the higher interest rates that are meant to combat it.

If rates remain elevated, the deficit could continue to grow. The Treasury’s refunding decision will signal how the government plans to manage its ballooning debt.

SoFi Securities (Hong Kong) Limited and its affiliates (SoFi HK) may post or share information and materials from time to time. They should not be regarded as an offer, solicitation, invitation, investment advice, recommendation to buy, sell or otherwise deal with any investment instrument or product in any jurisdictions. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
SoFi HK does not make any warranties about the completeness, reliability and accuracy of this information and will not be liable for any losses and/or damages in connection with the use of this information.
The information and materials may contain hyperlinks to other websites, we are not responsible for the content of any linked sites. The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi HK. These links are provided for informational purposes and should not be viewed as an endorsement. The risk involved in using such hyperlinks shall be borne by the visitor and subject to any Terms of Use applicable to such access and use.
Any product, logos, brands, and other trademarks or images featured are the property of their respective trademark holders. These trademark holders are not affiliated with SoFi HK or its Affiliates. These trademark holders do not sponsor or endorse SoFi HK or any of its articles.
Without prior written approval of SoFi HK, the information/materials shall not be amended, duplicated, photocopied, transmitted, circulated, distributed or published in any manner, or be used for commercial or public purposes.


About SoFi Hong Kong

About SoFi Hong Kong

SoFi – Invest. Simple.


SoFi Hong Kong is the All-in-One Super App with stock trading, robo advisor and social features. Trade over 15,000 US and Hong Kong stocks in our SoFi App now.