Treasury Bill Supply Cuts Loom as U.S. Debt Ceiling Set to Return
- Debt limits expected to be reinstated at end of July
- Supply cuts set to exacerbate mismatch in funding markets
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The U.S. Treasury is facing growing pressure to slash its bill supply to meet a debt ceiling target poised to be reinstated at the end of the month.
The potential return of the debt limit, last suspended in 2019, will force the department to cut its cash balance to around $450 billion by the end of July, from more than $700 billion on June 29. That means cutbacks in bill offerings will be needed to help draw down the balance. But after announcing plans to keep sales unchanged next week, the Treasury will only have three weeks left to rein in supply.