Treasury strategy is backwards here. You're running an $1.8T deficit but only net issuing $252B in long bonds (14% of the deficit) at 5.25% yields. Meanwhile you're buying back $192B of off-the-run 20s and 30s.
Term premium is compressed, nominal demand is solid, swap spreads are healthy. This is the exact setup where you should be pounding the long end — lock in duration at these levels while the market will take it.
Instead we're shortening the maturity profile into a deficit spiral. When the next refunding shock hits or demand wobbles, we'll be scrambling to issue at wider spreads with less runway. Classic case of optimizing for today's optics instead of structural positioning.
Term premium is compressed, nominal demand is solid, swap spreads are healthy. This is the exact setup where you should be pounding the long end — lock in duration at these levels while the market will take it.
Instead we're shortening the maturity profile into a deficit spiral. When the next refunding shock hits or demand wobbles, we'll be scrambling to issue at wider spreads with less runway. Classic case of optimizing for today's optics instead of structural positioning.