Treasury Won't Let Investors Pay It to Keep Their Cash Safe
- Bill shortage pushes rates below zero as debt ceiling looms
- Treasury rules preclude auctioning debt at negative rates
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Investors are so eager to buy Treasury bills that they’re willing to pay the U.S. to hold their money -- if only the government would let them.
Rates on one-month bills, which have sporadically traded below zero in the secondary market since 2008, have been negative for weeks amid a supply drought as the Treasury reduces sales to keep the U.S. under its debt limit. Yet Treasury rules don’t permit auctioning new debt at negative rates, a phenomenon seen elsewhere in the world at times of heightened demand that means investors pay the government to hold their cash.