- On Friday The Debt Ceiling Returns, And The Treasury Runs Out Of Cash 6 Months Later
by Tyler Durden, https://www.zerohedge.com/
While president Trump may have postponed one of the two major events scheduled to hit this Friday, March 1, the second one is still set to proceed as scheduled: that’s when the US debt limit suspension expires and the US debt ceiling will again return (incidentally the current debt ceiling was suspended when total debt was $1.5 trillion lower!), prompting Treasury Secretary Steven Mnuchin to draw upon extraordinary measures to keep the government within its statutory borrowing capacity for some time beyond March 1.
Which means that rates traders are wearily looking at the T-Bill curve to determine when analysts expect the Treasury to exhaust its extraordinary measures, at which point another debt ceiling crisis will become a very hot topic. And as the following chart of the infamous “kink” in bill yields shows, where the curve dislocation approximate the timing of the D-Date, the market believes that the US will run out of extenuating measures some time in the last week of August.