Treasury’s Record Cash Pile Is Jerome Powell’s $700 Billion Headache
- Government’s buffer is nearly double its target for end-June
- It’s the ‘gorilla in the room’ for funding markets: BMO’s Hill
Jerome Powell
Photographer: Olivier Douliery/AFP via Getty Images
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The U.S. Treasury is sitting on a near-record $1.5 trillion pile of cash, and what it does with it has become the biggest wild card for funding markets as quarter-end approaches.
The department’s initiative to ensure it always has enough money on hand to pay its bills is once again making it harder for the Federal Reserve to gauge how reserves in the banking system will unfold at a crucial juncture.