For the first time in more than five years, the U.S. Treasury will soon be scaling back its mammoth quarterly sales of notes and bonds, Wall Street dealers say. The shift will be so large it's likely to more than counter the Federal Reserve's looming reduction in asset purchases.

The Treasury Department on Wednesday will announce its so-called quarterly refunding of longer-term securities, when it typically lays out any coming changes to debt-issuance strategy. While most dealers expect no change in the $126 billion size of recent refundings, many see officials setting the stage for a reduction, perhaps starting in November.

Issuance has been going the other way for years, thanks to surging federal budget deficits in the wake of President Donald Trump's tax cuts and emergency spending in response to the pandemic. Even with Congress negotiating new spending on infrastructure and social programs, borrowing needs are set to drop, as lawmakers plan fresh revenue measures for those multiyear initiatives.