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Debt-Cap Concern Spurs Nervousness About Late December T-Bills

  • Kink evident as short-term rates climb on back of Fed comments
  • CBO report flags that government could run out of cash soon
Photographer: Samuel Corum/Bloomberg

Elevated yields on some Treasury bills maturing in late December are hinting at concern the U.S. will run out of borrowing capacity before the end of this year, veering toward a technical default.

The Dec. 23 bill is yielding around 0.11%, compared with 0.07% for the security that matures five days later. Yields across much of the bill curve edged higher on Tuesday after comments from Federal Reserve Chair Jerome Powell appeared to open the door for faster central bank policy tightening. But those on the Dec. 23 bill are up by 6 basis points, more than most, suggesting a potential crunch point.