One cost of the debt ceiling crisis that is lost among most political actors and the public is that the U.S. Treasury will need to refill its coffers. That need to sell debt—$1.1 trillion of it—along with a strong probability of another Federal Reserve rate hike or two during the third ... READ MORE >
Treasury bills
Recession debate: What does the forward market say about the business cycle?
During the Federal Open Market Committee press conference this week, Federal Reserve Chairman Jerome Powell said he did not believe the economy is in recession, noting that the broader economy continued to grow and employment remains solid. Alongside Powell’s comments, the forward market is another source ... READ MORE >
Chart of the day: Pricing in the December debt cliff
The Treasury bill market is pricing in a shortage of notes in November as the threat of a debt ceiling crisis grows. Despite the recent legislative passage of a 10-year infrastructure investment plan, Congress and the Biden administration are no closer to an agreement on lifting the debt ceiling. We ... READ MORE >
In a possible sign of things to come, looming debt-ceiling crisis induces a flight to cash
The front end of the Treasury curve is flashing red because of the possibility of another black swan event—the threat of default on Treasury securities on or around Oct. 18. Investors have begun dumping their safe-haven assets in favor of holding cash, causing interest rates on Treasury bills with ... READ MORE >