Treasury to stop selling 3-year note

With federal budget deficits narrowing, the government said Wednesday that it was discontinuing sales of three-year Treasury notes.

The Treasury Department said the last auction of three-year notes would occur next week as part of the quarterly debt auctions used to help finance the $8.8-trillion federal debt.

The government’s borrowing needs peaked in the 2004 budget year, when the federal deficit hit an all-time high in dollar terms of $413 billion.

Since then, the deficit has contracted and is projected to shrink further this year.

Smaller budget deficits mean less need for the Treasury Department to sell bills, notes and bonds to the public. Treasury said it had decided to discontinue the three-year note in order to keep the amounts of other securities at levels that would be popular with financial markets.

Treasury officials declined to comment on speculation that the government might halt sales of other debt securities as well.