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The US Capitol building in Washington, DC, US, on Tuesday, May 23, 2023.

The US Capitol building in Washington, DC, US, on Tuesday, May 23, 2023.

Photographer: Nathan Howard/Bloomberg
Markets
Economics

Debt-Ceiling Fear Sends Yields on At Risk T-Bills Above 7%

Default-risk concerns also appear to be affecting US equities too

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The deadlock in debt-ceiling negotiations is adding to default concern around a number soon-to-mature Treasury bills and also starting to dent investors' appetite for risk more broadly.

Yields on securities due in early June surged Wednesday as investors steered clear of more at-risk bills, with rates on several instruments topping 7%. Bills maturing in that time frame, a window that Treasury Secretary Janet Yellen has warned about repeatedly, are seen as most at risk of non-payment if the US government exhausts its borrowing capacity.

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