Dazed and Confused! 1m/3m T-Bill Curve Flirts With Zero Amid Debt-Ceiling Concerns

Sharing is Caring!

by Anthony B Sanders
Between The Federal Reserve FINALLY normalizing interest rates and the constant friction in Congress over the Federal budget and debt ceiling, the Treasury market seems dazed and confused.
(Bloomberg) — The spread between 1- and 3-month Treasury bills touched -1.93bp as anxiety surrounding the debt-ceiling deadline increased; spread currently at ~0.873bp.
Treasury reiterated in its refunding statement it expects to be able to fund the government through the end of February,
Increases in coupon supply will “eat into available borrowing authority and will further limit bill issuance until the debt ceiling is raised,” Jefferies economist Thomas Simons says in note.
Yields on Treasury bills maturing March 1 rose by 1.1bp to 1.439%, whileMarch 8 securities were little changed at 1.369%; the rate on March 15maturities was little changed at 1.339%
Barclays strategists said in weekly note that yield on March 1 bill could rise to 1.50% or more as budget negotiations drag on
ttbillcurve
Will Congress expand the statutory debt limit yet again? Of course! Notice the speed at which the debt ceiling has been raised after the last two recessions.
statdebtlimit
Both Congress and The Federal Reserve suffer from a communiction breakdown.

See also  Per McConnell: US won’t default on debt, up to dems to raise ceiling
See also  Apple threatened to take Facebook off App Store amid human trafficking concerns
542 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.