{"id":133797,"date":"2021-07-29T15:55:55","date_gmt":"2021-07-29T15:55:55","guid":{"rendered":"https:\/\/precoinnews.com\/?p=133797"},"modified":"2021-07-29T15:55:55","modified_gmt":"2021-07-29T15:55:55","slug":"analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/","title":{"rendered":"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force"},"content":{"rendered":"

(Reuters) – U.S. Treasury bills maturing this fall could face liquidity problems tied to a potential government cash crunch, which could happen if politicians delay or fail to renew the United States\u2019 borrowing authority after the debt ceiling returns at the end of the week.<\/p>

FILE PHOTO: Dividers are seen inside a trading post on the trading floor at the New York Stock Exchange (NYSE), May 22, 2020. REUTERS\/Brendan McDermid\/File Photo<\/figcaption>

The Treasury has been cutting bill issuance before its two-year debt ceiling suspension is due to expire on July 31. The government is expected to be able to get by until October or longer by using extraordinary measures, which may include suspending some investments and security issuance.<\/p>\n

Concerns that Congress could delay, or fail to increase the debt limit before the Treasury runs out of cash could lead investors to shun certain bills that come due when the government is likely to face cash shortfalls. Many analysts see this as most likely in October or November.<\/p>\n

Once there is a consensus around a date when the Treasury is likely to run out of cash, Treasury bills coming due in that period will likely be avoided, said Tom Simons, a money market economist at Jefferies in New York. \u201cThose bills will start to have a bit of a kink in the yield curve and they\u2019ll be very illiquid.\u201d<\/p>\n

Portfolio managers typically avoid bill issues that are at risk of default even if the likelihood of a failed payment is very low. This can send yields on some issues higher than those on longer-dated debt, an unusual occurrence in the yield curve, which is typically upward sloping.<\/p>\n

U.S. Treasury Secretary Janet Yellen last Friday urged lawmakers to increase or suspend the debt limit as soon as possible and said that Oct. 1, the first day of the next fiscal year, could be a critical date due to large federal outlays scheduled for then.<\/p>\n

Meanwhile, investors seeking more bills to buy may be disappointed even after the Treasury ceiling is raised or suspended, as the government is expected to pare debt sales following a record borrowing binge to finance COVID-19 related spending.<\/p>\n

\u201cWith the amount of money that they are raising through coupon auctions, unless they really want to build the cash balance way back up once they get through the debt ceiling debacle, then they are going to have to continue paying down bills,\u201d said Zachary Griffiths, an interest rate strategist at Wells Fargo.<\/p>\n

With a dearth of safe, short-term assets and record amounts of cash chasing yields, investors are expected to continue to turn to the Federal Reserve\u2019s reverse repurchase facility to generate returns.<\/p>\n

That facility, in which investors make overnight loans to the Fed that are backed by Treasuries at a rate of 5 basis points, drew $965 billion in demand on Wednesday and analysts expect demand will continue to grow.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

(Reuters) – U.S. Treasury bills maturing this<\/p>\n","protected":false},"author":3,"featured_media":133796,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"\nAnalysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"(Reuters) – U.S. Treasury bills maturing this\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-07-29T15:55:55+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/07\/Analysis-Some-Treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/\",\"url\":\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/\",\"name\":\"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force - Pre Coin News\",\"isPartOf\":{\"@id\":\"https:\/\/precoinnews.com\/#website\"},\"datePublished\":\"2021-07-29T15:55:55+00:00\",\"dateModified\":\"2021-07-29T15:55:55+00:00\",\"author\":{\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\"},\"breadcrumb\":{\"@id\":\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/precoinnews.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Markets\",\"item\":\"https:\/\/precoinnews.com\/category\/markets\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/precoinnews.com\/#website\",\"url\":\"https:\/\/precoinnews.com\/\",\"name\":\"Pre Coin News\",\"description\":\"precoinnews.com\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/precoinnews.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\",\"name\":\"mediabest\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"caption\":\"mediabest\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force - Pre Coin News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/","og_locale":"en_US","og_type":"article","og_title":"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force - Pre Coin News","og_description":"(Reuters) – U.S. Treasury bills maturing this","og_url":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/","og_site_name":"Pre Coin News","article_published_time":"2021-07-29T15:55:55+00:00","author":"mediabest","twitter_card":"summary_large_image","twitter_image":"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/07\/Analysis-Some-Treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force.jpg","twitter_misc":{"Written by":"mediabest","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/","url":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/","name":"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force - Pre Coin News","isPartOf":{"@id":"https:\/\/precoinnews.com\/#website"},"datePublished":"2021-07-29T15:55:55+00:00","dateModified":"2021-07-29T15:55:55+00:00","author":{"@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a"},"breadcrumb":{"@id":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/precoinnews.com\/markets\/analysis-some-treasury-bills-likely-to-be-shunned-as-debt-ceiling-comes-back-into-force\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/precoinnews.com\/"},{"@type":"ListItem","position":2,"name":"Markets","item":"https:\/\/precoinnews.com\/category\/markets\/"},{"@type":"ListItem","position":3,"name":"Analysis-Some Treasury bills likely to be shunned as debt ceiling comes back into force"}]},{"@type":"WebSite","@id":"https:\/\/precoinnews.com\/#website","url":"https:\/\/precoinnews.com\/","name":"Pre Coin News","description":"precoinnews.com","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/precoinnews.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a","name":"mediabest","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","caption":"mediabest"}}]}},"_links":{"self":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/133797"}],"collection":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/comments?post=133797"}],"version-history":[{"count":0,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/133797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media\/133796"}],"wp:attachment":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media?parent=133797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/categories?post=133797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/tags?post=133797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}