Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Life Health > Life Insurance

Treasury Bill Curve Shows `Red-Letter' Date Causing Anxiety

By Alexandra Harris, Bloomberg

X
Your article was successfully shared with the contacts you provided.

While the latest rhetoric from Washington is in favor of a so-called clean increase in the debt ceiling, the Treasury bill market isn’t buying it.

(Related: Mnuchin Says Prioritizing Debt Payments `Doesn’t Make Sense’)

Traders are already willing to pay more for debt expiring after October to avoid being caught holding securities potentially vulnerable to a technical default as bills maturing Oct. 5 are yielding 1.078%, versus 1.05% for securities due Nov. 2, as progress to expand the nation’s statutory debt limit stalls.

Treasury Secretary Steven Mnuchin said in a July 28 letter to Congress that it’s “critical” for Congress to act by Sept. 29, the first time a specific date has been attached to debt-ceiling warnings.

That may prove to be nerve wracking with the House of Representatives already on recess and the Senate unlikely to tackle the issue in the next week. That would give lawmakers 12 legislative sessions to resolve the issue when they return Sept. 5.

The fact that Treasury designated Sept. 29 as a “red-letter date” heightens the headline risks in all of the Treasury’s early October maturities, Lou Crandall, chief economist at Wrightson ICAP, wrote in a note Monday.

— Read S&P’s Prescient Warning on America’s Fiscal Unpredictability on ThinkAdvisor.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.