Feb 23 2025 3 mins
Scott Bessent, sworn in as the 79th Secretary of the Treasury on January 28, 2025, by Supreme Court Justice Brett M. Kavanaugh, has quickly immersed himself in the complexities of his new role. Following his swearing-in ceremony, Bessent was welcomed by department employees at the U.S. Treasury and began his first working day with meetings with senior Treasury officials.
As Secretary, Bessent is tasked with maintaining a strong economy, fostering economic growth, and creating job opportunities for all Americans. His extensive background in the global investment management business, spanning 40 years and including roles such as Chief Executive Officer and Chief Investment Officer of Key Square Capital Management and Chief Investment Officer of Soros Fund Management, positions him well for this role. Bessent's experience also includes serving as an adjunct professor at Yale University, where he taught economic history.
Recently, the Treasury Department, under Bessent's leadership, released its February 2025 Quarterly Refunding Statement. This statement outlines the Treasury's plans to refund approximately $106.2 billion of privately-held Treasury notes and bonds maturing on February 15, 2025, by issuing new securities. The issuance includes a 3-year note for $58 billion, a 10-year note for $42 billion, and a 30-year bond for $25 billion. These auctions are scheduled to take place on February 11, 12, and 13, respectively, and will settle on February 18, 2025[1].
The Treasury also plans to address its financing requirements through regular weekly bill auctions, cash management bills (CMBs), and monthly note, bond, Treasury Inflation-Protected Securities (TIPS), and 2-year Floating Rate Note (FRN) auctions. Notably, the Treasury will maintain nominal coupon and FRN auction sizes for at least the next several quarters, with incremental increases to TIPS auction sizes to maintain a stable share of TIPS in the total marketable debt outstanding[1].
In light of the current fiscal backdrop, the Treasury Borrowing Advisory Committee (TBAC) reviewed the Treasury's February 2025 Quarterly Refunding Presentation. The committee noted that economic activity has continued to advance at a solid pace, with real GDP up 2.8% on average in 2024, supported by consumer spending and contributions from business and housing investment. Despite robust growth, labor demand has shown some softening, with the unemployment rate stabilizing at 4.1%-4.2% in the second half of 2024[3].
The Treasury's financing estimates indicate privately-held net marketable borrowing of $815 billion in Q2 FY 2025, with an assumed end-of-March cash balance of $850 billion. This estimate is $9 billion lower than the previous projection made in October 2024. The Treasury's plans are contingent on the assumption of a debt limit suspension or increase[3].
In addition to these financial plans, the Treasury is also navigating the use of extraordinary measures to finance the government on a temporary basis due to debt limit constraints. This has led to greater variability in benchmark bill issuance and significant usage of CMBs. The Treasury plans to transition the 6-week CMB to benchmark status, with the first benchmark 6-week bill auction scheduled for February 18, 2025[1].
Overall, Secretary Bessent's tenure is off to a busy start, marked by significant financial planning and strategic decisions aimed at maintaining the stability and health of the U.S. economy.
As Secretary, Bessent is tasked with maintaining a strong economy, fostering economic growth, and creating job opportunities for all Americans. His extensive background in the global investment management business, spanning 40 years and including roles such as Chief Executive Officer and Chief Investment Officer of Key Square Capital Management and Chief Investment Officer of Soros Fund Management, positions him well for this role. Bessent's experience also includes serving as an adjunct professor at Yale University, where he taught economic history.
Recently, the Treasury Department, under Bessent's leadership, released its February 2025 Quarterly Refunding Statement. This statement outlines the Treasury's plans to refund approximately $106.2 billion of privately-held Treasury notes and bonds maturing on February 15, 2025, by issuing new securities. The issuance includes a 3-year note for $58 billion, a 10-year note for $42 billion, and a 30-year bond for $25 billion. These auctions are scheduled to take place on February 11, 12, and 13, respectively, and will settle on February 18, 2025[1].
The Treasury also plans to address its financing requirements through regular weekly bill auctions, cash management bills (CMBs), and monthly note, bond, Treasury Inflation-Protected Securities (TIPS), and 2-year Floating Rate Note (FRN) auctions. Notably, the Treasury will maintain nominal coupon and FRN auction sizes for at least the next several quarters, with incremental increases to TIPS auction sizes to maintain a stable share of TIPS in the total marketable debt outstanding[1].
In light of the current fiscal backdrop, the Treasury Borrowing Advisory Committee (TBAC) reviewed the Treasury's February 2025 Quarterly Refunding Presentation. The committee noted that economic activity has continued to advance at a solid pace, with real GDP up 2.8% on average in 2024, supported by consumer spending and contributions from business and housing investment. Despite robust growth, labor demand has shown some softening, with the unemployment rate stabilizing at 4.1%-4.2% in the second half of 2024[3].
The Treasury's financing estimates indicate privately-held net marketable borrowing of $815 billion in Q2 FY 2025, with an assumed end-of-March cash balance of $850 billion. This estimate is $9 billion lower than the previous projection made in October 2024. The Treasury's plans are contingent on the assumption of a debt limit suspension or increase[3].
In addition to these financial plans, the Treasury is also navigating the use of extraordinary measures to finance the government on a temporary basis due to debt limit constraints. This has led to greater variability in benchmark bill issuance and significant usage of CMBs. The Treasury plans to transition the 6-week CMB to benchmark status, with the first benchmark 6-week bill auction scheduled for February 18, 2025[1].
Overall, Secretary Bessent's tenure is off to a busy start, marked by significant financial planning and strategic decisions aimed at maintaining the stability and health of the U.S. economy.