Proportion of U.S. Short-Term Treasury Bonds Increases to 21%

The proportion of short-term Treasury bonds in the U.S. Treasury market has increased to 21%, shifting the borrowing structure towards shorter maturities. This is related to government borrowing costs, dollar liquidity, and demand in the short-term funding market. The U.S. Treasury is meeting the rising borrowing demand with short-term Treasury bonds, and this proportion is close to the peak level observed after the COVID-19 response in 2020. It exceeds the range of 10-15% seen from 2012 to 2019, and during the 2008 financial crisis, it reached about 34%. Short-term Treasury bonds have shorter maturities, allowing them to quickly absorb market demand; however, changes in interest rates are reflected in government refinancing costs more rapidly. The Treasury is expected to maintain the size of its auctions in the quarterly refinancing statement for May 2026 and plans to adjust the regular short-term Treasury auction sizes to respond to unexpected borrowing demands. The Treasury Borrowing Advisory Committee has assessed that a funding shortfall will occur in the fiscal year 2027, projecting a shortfall of $1.3 trillion in 2027-2028. This increase in the supply of short-term Treasury bonds may influence discussions on stablecoin reserve assets and risk asset allocation. However, the direct impact of the increased proportion of short-term Treasury bonds on the prices of Bitcoin or altcoins has not been confirmed.

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