Debt-Ceiling Relief May Be Short as Focus Turns to T-Bill Deluge
- US Treasury needs to replenish its thinned-out cash pile
- T-bill issuance could drive bank borrowing costs higher
This article is for subscribers only.
Bond traders look set to pivot from worrying the US wouldn’t raise its debt limit to fretting about what the increase means for money markets.
The concern is that with a tentative deal pending, the Treasury will soon replenish its cash balance by selling more than $1 trillion of bills through the end of the third quarter, according to recent estimates. The US cash stockpile currently sits at $39 billion, the lowest since 2017.