Citi Group (C.US) forecasts that the US Treasury will cut issuance by $3 billion in each round of 20-year and 30-year bond auctions, shifting instead to short-term Treasury bills for funding, and may even cancel the 20-year bond entirely, with the relevant announcement expected on November 4, according to Woofun AI.

Market data reveals the dynamics behind this strategy. On October 9, the 10-year US Treasury yield stood at 5.24%, while the 30-year reached 5.60%; on October 1, the 10-year yield hit its highest level since 2002, and on the same day the US Treasury used its full $6 billion buyback capacity to repay long-term debt.

Although US Treasury Secretary Scott Bessent issued a challenge to traders in September to take control of the situation, yields have continued to climb. Data compiled by Woofun AI shows that on October 9, the 3-month Treasury bill yield was only 4.25%, far below the cost of long-term debt, prompting Citi Group to predict that the Treasury will further reduce long-term bond issuance.

Macro debt pressures coexist with expert skepticism. As of August, the national debt exceeded $40 trillion, with annual interest expenses reaching $1.1 trillion. BNP Paribas strategists believe this move cannot lower borrowing costs, and Kevin Flanagan, Head of Investment Strategy at WisdomTree (WT.US), also questioned its feasibility in August. Bloomberg cited his remarks pointing out that from a mathematical standpoint, it is extremely difficult to close the gap while reducing long-term debt issuance.

Linkage effects on the crypto market are emerging. When the 10-year US Treasury yield hit a new high since 2002, Bitcoin's price fell, currently trading at $84,030, up 1.2% within 24 hours, mainly influenced by the latest remarks from US President Trump. Next week's US Treasury survey of bond dealers and the refinancing plan to be released on November 4 will reveal whether Washington chooses shorter-term financing and the subsequent direction of long-term bond yields.