, Columnist
The Treasuries Tsunami Is No Deathtrap for Banks
The Fed has the tools to ease the pressure on deposits and markets.
U.S. Secretary of the Treasury Janet Yellen
Photographer: Alex Wong/Getty Images North AmericaThis article is for subscribers only.
With the US debt ceiling standoff defused, the Treasury can start borrowing big money again. The government is forecast to issue up to $1 trillion of debt this year in short-term bills, sucking cash out of the US financial system.
This has some bank analysts and market strategists fretting about the dangers to financial stability and the valuation of stocks or other risky assets, especially as the Federal Reserve continues to shrink its balance sheet, unwinding its ultra-loose monetary policies at the same time.