Across Wall Street, debate has been growing over what Scott Bessent might do to help reign in US government bond yields near multi-decade highs. (EPA Images pic)NEW YORK: US Treasury Secretary Scott Bessent is likely to reduce the auction sizes for long-dated government bonds — and could even cancel sales of 20-year debt altogether, according to Citigroup Inc.

The bank’s base case is a US$3 billion reduction per auction for both 20- and 30-year bonds, which would be funded by additional T-bill issuance, according to head of US rates strategy Jason Williams. That would be announced at the Treasury Department’s next quarterly refunding announcement on Nov. 4.

The Citi strategist recommended in a late Friday note that clients position for 20-year bonds to outperform 10-year notes on the prospect of a “reduction, or perhaps cancellation, of the 20-year bond.”