Citi's latest analysis suggests a bullish outlook for U.S. Treasuries as the Treasury Department is expected to maintain nominal coupon sizes at the upcoming February refunding meeting. The report, dated January 24, 2025, highlights that the Treasury's reliance on T-bills is likely to continue, with no immediate plans to increase coupon auction sizes. "We expect continued guidance for nominal coupon sizes to remain constant for several quarters," Citi analysts note, emphasizing the potential for a stable T-bill share in the short term. The report also points to a light bullish stance on duration, with term premiums considered too high, and suggests that the Federal Reserve is unlikely to hike rates in 2025, which should help anchor yields. Additionally, foreign private demand for U.S. Treasuries has slowed, with only a $4 billion increase in holdings in November, indicating a cautious approach from international investors. As the market navigates these dynamics, Citi advises a focus on positive carry strategies, such as receiving 10y10y versus paying 20y15y in swaps, to capitalize on current conditions.