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SIFMA today issued its quarterly government securities issuance and rates forecast for the third quarter of 2013. The full report is available at the following link: http://sifma.org/govtforecast3q2013/.
Highlights of the forecast include:
SIFMA forecasts total net Treasury bill, note and bond issuance to be $163.5 billion in the third quarter of 2013, much higher than the net $10.7 billion redeemed in the second quarter (actuals include cash management balances).
Survey respondents forecast that Treasury will issue $43.0 billion of Treasury Inflation-Protected Securities (TIPS) in the third quarter, 13.2 percent above the $38 billion issued in the second quarter.
The median forecast for net issuance of Treasury coupon securities is $201.0 billion for the third quarter, 4.4 percent lower than the second quarter's net issuance of $210.3 billion. The forecasted decrease is due to the unusually high issuance of those notes in the previous quarter due to the timing of the releases, rather than an actual increase in Treasury borrowing.
Survey participants forecast total gross coupon issuance by the four largest Federal agencies to increase $184.5 billion in the third quarter of 2013. The projections reflect a 66.6 percent increase from the second quarter with much of the forecasted increase coming from Fannie Mae and the Federal Home Loan Banks.
Survey participants expect to see net bill redemption of $37.5 billion in the third quarter, a much different result than the net $221.0 billion redeemed in the second quarter. The expectations for the net bill redemption in the third quarter were similar among the survey respondents, showing consensus in the direction as well as the scale in forecast for net bill issuance.
