Global Markets Daily: Halftime Check-In For Treasury Demand

Research evidence excerpt

Global Markets Daily: Halftime Check-In For Treasury Demand

Economics Research

16 July 2026 | 11:26AM EDT

n Treasury has kept coupon auction sizes steady this year, with the result that net Friedrich Schaper

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coupon supply through mid-year is $624bn. We expect $605bn additional net friedrich.schaper@gs.com

Goldman Sachs & Co. LLC

coupon supply in the second half of the year, while T-bill supply is poised to pick

William Marshall

up in Q3 after a seasonal lull. +1(212)357-0413 | william.c.marshall@gs.com

n The Fed’s switch from QT to a net buyer of Treasuries has been the largest

change relative to last year. The Fed purchased about $250bn of T-bills through

the first half of the year and we expect a further $130-140bn in bill purchases by

year-end, with the deceleration mostly reflecting the slower pace of reserve

management purchases.

n Continued money fund AUM growth supported by still high front-end rates has

provided a benign funding backdrop. With greater risk asset volatility and

expectations for policy rates to remain high, we expect this to continue, though

increased policy uncertainty could continue to weigh on money fund WAM.

n Measures of long-end demand suggest real money duration appetite has been

episodic and price sensitive. Increased availability of longer term corporate

supply may erode certain sources of Treasury demand, though we do not view

this as having had an outsized effect on long-end valuations compared to macro

drivers.

n Foreign official buying has slowed notably, although much of that shift can be

explained by the strengthening in the USD rather than a structural shift in

demand patterns. Foreign private buyers have been a continued steady source of

net demand.