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Bond Market's Debt-Ceiling Alarm Bell Is Ringing Loud and Clear

  • Investors demand higher yield to hold early March T-bills
  • Feb. 6 four-week bill sale may show angst on drop-dead date
Trading On The Floor Of The NYSE As Stocks Fall While Treasury Yields Climb to 2014 Highs
Photographer: Michael Nagle/Bloomberg

In the $2 trillion Treasury-bill market, where the U.S. government turns for short-term funding, investors are showing they’re plenty nervous about the approaching deadline to raise the nation’s debt ceiling.

With Treasury expected to exhaust its borrowing authority as early as the first half of March, a four-week bill sale on Tuesday will serve as the latest gauge of investor anxiety. There’s growing concern that the impasse over the debt limit will become entangled with efforts to keep the government open. Current federal funding expires Feb. 8, and the Republican-led Congress has been working on a stopgap measure to extend that into late March.