The Bond Market Association today projected $75 billion in U.S. Treasury issuance this quarter, a significant spike as a result of increased government spending and a rising deficit.

The BMA expects the 10-year T-bill rate to increase to 4.15% and 4.25% by the end of June and September, respectively. Current 10-year Treasurys were yielding 3.89% as of 2:30 p.m. “The two-year yield is expected to increase more sharply to 1.85% by the end of June and 2.00% by the end of September from the 1.49% yield seen at the end of the first quarter of this year,” the BMA reports.

Fixed rate asset-backed spreads could tighten as a result.

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