US Treasury looks to issue more inflation notes

WASHINGTON Feb 3 (Reuters) - The U.S. Treasury is considering increasing the frequency of auctions for its inflation-related debt, and "everything is on the table," for the changes, an official said on Wednesday.

Treasury will issue more Treasury Inflation-Indexed Securities and consider increasing the frequency of TIPS auctions to include a second reopening to a 10-year TIPS auction.

The comments came as the department announced an $81 billion quarterly debt refunding, a level that matches a record amount set in the previous quarter and which Treasury says will allow it to begin cutting auction sizes.

As the country's fiscal situation improves, financing needs will decline and the Treasury is confident demand will remain strong for all of its securities, the official said.

Some of the concern surrounding the impending end of the Federal Reserve's asset purchase programs, put in place to address the financial crisis last year, has begun to abate and has been priced into the market, according to the official.

If Congress raises the country's debt ceiling, and the Fed -- the U.S. central bank -- asks, the Treasury has the flexibility to increase a supplemental financing program for the Fed. But it currently is not counting on increasing the program, the official said. (Reporting by Mark Felsenthal and Corbett Daly; Editing by James Dalgleish)