Wall Street forecasts $1 trillion in U.S. short-term debt issuance.

According to the Financial Times of the UK, Wall Street banks expect the U.S. to borrow approximately $1 trillion through short-term Treasury issuance over the next year to meet rising government funding needs. Bank of America forecasts that, in the new fiscal year ending September 2027, net new borrowing by the U.S., excluding refinancing of maturing debt, will be around $1.07 trillion; JPMorgan estimates short-term Treasury issuance in 2027 at approximately $1.09 trillion, while Goldman Sachs forecasts $961 billion. As short-term debt issuance increases, the cost of long-term U.S. borrowing has risen to its highest level since 2007; previously, Treasury Secretary Scott Bessent aimed to lower long-term rates by expanding buybacks of 10- to 30-year Treasuries. Bank of America expects the outstanding amount of U.S. short-term Treasuries to reach approximately $8 trillion by next September, accounting for 24.3% of tradable Treasuries; Goldman Sachs forecasts this ratio at 24.3% next year and rising to 24.9% in 2028. This level approaches the peak seen during the pandemic, while the U.S. Treasury’s Borrowing Advisory Committee previously recommended maintaining a long-term short-term debt share of around 20%. Analysts note that increasing short-term debt issuance helps reduce current financing costs but raises future refinancing risks. Mark Cabana, Head of Interest Rate Strategy at Bank of America, stated that the Treasury is balancing supply and demand in the bond market, but large-scale short-term issuance could lead to “larger and more volatile” interest expenses. Meanwhile, the Federal Reserve has purchased substantial amounts of short-term Treasuries this year, and money market funds