With the federal budget deficit deepening more rapidly than predicted, the Treasury has begun to change its security auctions.
For instance, Tuesday it will sell $22 billion in five-year notes, an increase from its sales of $16 billion in February and $11 billion last August. In addition, it will sell $11 billion in 10-year notes Wednesday.
Since the five-year-note auction will be so large, it will not be a reopening of the February issue, as it would have been in the past. And the Treasury is studying whether to drop its practice of reopening 10-year note issues as well.
The Wednesday sale will be a reopening of the one in February. Analysts said increasing the size of the five-year-note auctions probably will raise their yields compared with those of two-year notes.