Treasury's August Refunding: $125 Billion Raised, Coupon Sizes Held Steady Through October

What Treasury Announced

On August 5, 2026, Deputy Assistant Secretary for Federal Finance Brian Smith released Treasury's Quarterly Refunding Statement for the third quarter of 2026 — the document that turns the broad borrowing estimate Treasury gave on August 3 ($739 billion in privately-held net marketable debt for July–September) into specific auction sizes. Treasury is offering $125 billion of securities to refund approximately $96.3 billion of privately-held Treasury notes and bonds maturing August 15, 2026, which will raise about $28.7 billion in new cash from private investors.

The Three Auctions

The refunding is split across three maturities. A 3-year note worth $58 billion will be auctioned at 1:00 p.m. EDT on Tuesday, August 11. A 10-year note worth $42 billion follows at 1:00 p.m. EDT on Wednesday, August 12. A 30-year bond worth $25 billion closes out the refunding at 1:00 p.m. EDT on Thursday, August 13. All three auctions will be conducted on a yield basis and settle on Monday, August 17, 2026.

Coupon Sizes Held Steady

Treasury said its current auction sizes leave it "well positioned" to handle potential changes to the fiscal outlook and to the size and composition of the Federal Reserve's System Open Market Account (SOMA) portfolio. Based on current projected borrowing needs, Treasury said it anticipates maintaining its nominal coupon and floating-rate note (FRN) auction sizes for at least the next several quarters. Treasury published a table showing August-through-October 2026 auction sizes essentially matching the May-through-July 2026 pattern across every maturity from 2-year notes through 30-year bonds — meaning no near-term change to the regular monthly issuance calendar. TIPS auction sizes are also being held at current levels: $8 billion for the August 30-year TIPS reopening, $19 billion for the September 10-year TIPS reopening, and $26 billion for the October 5-year TIPS new issue.

Bills and Cash Balance

For shorter-dated bills, Treasury said it expects to maintain current benchmark bill auction sizes in the coming weeks, with a possible short-dated cash management bill (CMB) around the end of August. It flagged plans to reduce shorter-dated bill sizes in September, ahead of the mid-September corporate and non-withheld tax date, before increasing bill auction sizes again in October to cover seasonal outflows. On the cash balance itself, Treasury is assuming a $950 billion balance at the end of September, but projects the Treasury General Account could peak at roughly $1.05 trillion (plus or minus $50 billion) in late October, which it described as consistent with its long-standing cash-balance policy.

Buybacks

Treasury also released a tentative buyback schedule for the quarter, saying it anticipates purchasing up to $38 billion in off-the-run securities for liquidity support and up to $25 billion in securities maturing within one month to two years for cash-management purposes. The next quarterly refunding announcement is scheduled for November 4, 2026.

Reader Q&A

Q: How does this relate to the $739 billion borrowing estimate from August 3? A: The August 3 release was a broad quarterly total; this August 5 statement is the detailed financing plan that specifies exactly which securities Treasury is issuing and in what sizes to meet that total, starting with this month's $125 billion refunding.

Q: Why does the size of the refunding matter to investors? A: The mix between short-, medium- and long-dated securities affects how new supply is absorbed across the yield curve. A refunding weighted more toward long bonds, for instance, can put more pressure on long-term yields than one weighted toward short notes.

Q: What does "holding coupon sizes steady" actually mean? A: It means Treasury isn't increasing the regular monthly amount of 2-year, 3-year, 5-year, 7-year, 10-year, 20-year and 30-year note and bond auctions beyond what's already scheduled — any extra borrowing need is being absorbed through bills and cash management tools instead.

Q: Why would the Treasury General Account balance jump to $1.05 trillion in October? A: Treasury said this reflects large seasonal cash outflows expected in late October, combined with its standing policy of holding enough cash on hand to manage those swings without disrupting the bill market.

Q: What are Treasury buybacks and why is Treasury doing them? A: Buybacks are purchases of older, less-traded ("off-the-run") Treasury securities. Treasury uses them for two separate purposes: supporting liquidity in older securities and, separately, managing its cash position — this quarter it plans up to $38 billion of the former and $25 billion of the latter.