Investing.com -- Goldman Sachs anticipates the U.S. Treasury Department will raise its near-term borrowing projections when it releases financing estimates at 3pm on Monday, May 4. The bank estimates marketable borrowing of $185 billion for the second quarter, compared to the $109 billion projected at the February refunding meeting.

Goldman Sachs expects no changes to nominal coupon or Treasury Inflation-Protected Securities auction sizes this quarter, which implies net bill supply of negative $121 billion for the second quarter.

The bank highlighted two areas requiring attention when Treasury releases refunding documents at 8:30am on Wednesday, May 6. These include potential adjustments to Treasury's communication about future auction size increases and discussion about the impact of ongoing changes to bank regulation on Treasury demand.

Due to modest downward revisions to deficit projections, Goldman Sachs now expects Treasury to begin increasing coupon auction sizes from February 2027, one quarter later than previously projected. The bank continues to expect that eventual auction size increases will be gradual and limited to 2-to-7 year maturities.

The later start to coupon increases creates uncertainty around Treasury's longstanding guidance that current sizes are likely to remain in place for at least the next several quarters. Goldman Sachs believes some modification to the guidance or surrounding language is more likely than not, given the impact of the Supreme Court's IEEPA ruling on borrowing needs and the Treasury Borrowing Advisory Committee's suggestion that current projections could warrant coupon size increases in fiscal year 2027.