MINUTES OF THE MEETING OF THE

TREASURY BORROWING ADVISORY COMMITTEE

OF THE BOND MARKET ASSOCIATION

May 4, 1999

The Committee convened at 9:00 a.m. at the Treasury Department for the portion of the 

meeting that was open to the public. All members were present except Mr. Mortara and Mr. 

Pike. The Federal Register announcement of the meeting and a list of Committee members are 

attached. 

Under Secretary for Domestic Finances Gary Gensler welcomed the Committee and the 

public to the meeting. John Auten, Director, Office of Macroeconomic Analysis, summarized 

the current state of the U.S. economy (statement attached). Jill Ouseley, Director, Office of 

Market Finance, presented the chart show, which had been released to the public on May 3, 

updating Treasury borrowing estimates and historical debt and interest rate statistics. 

The public meeting ended at 9:40 a.m. 

The Committee reconvened in closed session at the Madison Hotel at 11:45 a.m. All 

members were present except Mr. Mortara and Mr. Pike. Under Secretary Gensler gave the 

Committee its Charge, which is also attached. 

The Committee began by reviewing a proforma financing plan (attached) for the AprilJune quarter. The Committee unanimously agreed to the May refunding recommendation 

contained in the financing plan. That is, the Committee recommended new issues of 5-year 

notes in the amount of $15 billion and of 10-year notes in the amount of $12 billion. 

The Committee then turned to a general discussion of the established Treasury practice 

of issuing cash management bills. While the discussion did not lead to a Committee 

recommendation, arguments were made in favor of the current approach and of relying on 

more regular bill financing to bridge low points in the Treasury cash balance. 

In response to the question in the Charge pertaining to possible adjustments to the 

Treasury borrowing program, the Committee discussed the merits of maintaining large, liquid 

supplies of Treasury bills and of notes and bonds. The section of the Committee=s report in 

February 1999 was read in connection with such adjustments. The consensus recommended 

that the Treasury could bolster market liquidity across the curve by engaging in secondary 

market buy-backs of older Treasury securities and that the Committee would be prepared to 

advise the Treasury on the contents of any Treasury regulation to provide for the mechanics of 

buy-backs. 
By consensus, the Committee was satisfied to follow the July-September financing plan 

in the proforma table (also attached). Several members noted that the Committee may want to 

consider recommending adjustments to the sizes of new issues when it meets in connection with 

the August refunding. 

Responding to the question in the Treasury Charge, the Committee discussed briefly, but 

did not decide to recommend, shortening the when-issued period for new issues of 2-year notes. 

The meeting adjourned at 1:15 p.m. 

The Committee reconvened at the Madison Hotel at 6:00 p.m. All members were 

present except Mr. Pike. The Chairman presented the Committee report to Deputy Assistant 

Secretary Lee Sachs and Fiscal Assistant Secretary Hammond. A brief discussion followed the 

Chairman=s presentation, but did not raise significant questions regarding the report=s content. 

The meeting adjourned at 6:10 p.m. 

Jill K. Ouseley, Director 

Office of Market Finance 

May 5, 1999 

Certified by: 

Stephen Thieke, Chairman

Treasury Borrowing Advisory Committee

of The Bond Market Association

May 5, 1999