Goldman Sachs: US Debt Issuance—Limited Evidence of a Duration Supply Imbalance

Key Takeaways

• 1.Longer-term USD bond supply is projected to hit record notional highs of $2.6tn in 2026 and $2.85tn in 2027, but remains within post-pandemic norms when normalized as a percentage of nominal GDP (8% to 8.5%).
• 2.Large non-financial IG issuance pushes long-end UST yields higher on pricing days, but there is little evidence of a persistent or reliable supply dislocation over a one-week horizon.
• 3.The impact of large IG issuance on MBS spreads is limited; current-coupon MBS OAS correlates much more strongly with Treasury yield moves than with IG corporate credit spreads.

Table of Contents

• US Debt Issuance—Limited Evidence of a Duration Supply Imbalance
• Context on the USD Bond Supply Picture
• Evidence of Supply Impact onto UST Yields and MBS Spreads
• TRADE IDEAS
• Best Trade Ideas Across Assets

Report data

Exhibit 5: Controlling for oil and front-end rates, we find that 30y UST yields have tended to rise more on days with heavier IG duration supply, but the evidence is weaker over longer horizons

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