Highlights
As expected, the Treasury's quarterly refunding came in at $81 billion, split between $40 billion in 3-year notes, $25 billion in 10-year notes, and $16 billion in 30-year bonds. News in the announcement includes the replacement of the 20-year TIPS with a 30-year TIPS, which the Treasury said offers holders better inflation protection. The 30-year TIPS will be auctioned semiannually in January and August. The Treasury said it may increase the number of TIPS auctions though the dollar proportion of TIPS issuance continues to decline.

The Treasury is stressing that auction sizes will grow gradually through next year and 2011. They expect total issuance in fiscal year 2010 at $1.5 to $2.0 trillion. In further notes, the Treasury expects to hit the debt ceiling in mid to late December, and beginning Nov. 9, all bill auctions will be at 11:30 a.m. ET. In perhaps the most important note, the Treasury is warning that the end of its $300 billion Treasury purchase program, which closed out last week, may put upward pressure on interest rates. Demand for Treasuries edged lower following the statement.