Treasury plans to borrow $618 billion this quarter as 10-year auctions clear above 5%

Treasury said on November 2 it expects to borrow $618 billion in privately held marketable debt this quarter, assuming it ends December with $850 billion in cash ^[1]. That is $10 billion below its August estimate, mostly because it started the quarter with more cash than planned ^[1].

Leave out that higher starting balance and the estimate is $24 billion higher than in August ^[1]. For January through March, Treasury expects to borrow another $800 billion ^[1].

The last three 10-year auctions sold at higher yields each time

The $39 billion 10-year reopening on October 7 sold at a 5.30% high yield with a bid-to-cover ratio of 2.77 ^[3]. In August, the new 10-year sold at 4.683% ^[3].

Demand held up even at higher yields. Primary dealers, who absorb what other bidders leave, took 2.5% of competitive awards in October, down from 8.6% in August, we calculate from the accepted amounts ^[3].

The 30-year bond sold at 5.618% on October 8, up from 5.308% a month earlier ^[3].

Treasury links the rise in yields to growth

In its statement to the borrowing advisory committee, Treasury said the 10-year yield was 4.18% at the end of 2025 and had risen 76 basis points by October 30 ^[2]. It pointed to growth optimism and higher demand for capital, and said fiscal sustainability was not a significant driver ^[2].

The same statement said real GDP grew at a 3.4% annual rate in the third quarter while residential investment fell 3.3% ^[2]. Ahead of the November refunding, Treasury asked dealers to forecast coupon auction sizes through fiscal 2029 ^[4].

How to use this

For commercial and investment-property borrowers

1. Ask your lender which Treasury yield your fixed rate is priced from and what spread sits on top. The 10-year yield was 4.91% on November 2 ^[5], so a quote of 7% on a 10-year loan implies a spread of about 2.1 points.
2. Run your debt service coverage test at the higher end of recent yields. We calculate that the 0.62-point rise between the August and October 10-year auctions ^[3] adds about $12,300 a year in interest on a $2 million interest-only loan.
3. Get a rate lock in the term sheet with the lock date and the index level written down, so you know which day’s yield the lender used.

For homebuyers

1. Check the 10-year yield on the day you get each mortgage quote. The 30-year mortgage averaged 7.24% in the week of October 29 ^[6] while the 10-year was 4.91% ^[5], so a quote that does not move when the 10-year falls is one to question.

For investors and lenders

1. Read the borrowing estimates and auction sizes together each quarter. Treasury expects $1.418 trillion of borrowing over the next two quarters by our math from its estimates ^[1], and auction results show whether buyers absorb it without a jump in yields.
2. Track the dealer share at each 10-year auction. It fell to 2.5% in October ^[3], and a rise back toward August’s 8.6% could suggest weaker end-investor demand.
3. Watch the cash balance assumptions next to the borrowing number. Treasury plans to run its cash from $984 billion at the end of September to $850 billion at the end of December ^[1], which lowers what it needs to raise this quarter.