The Treasury has announced a “provisional” auction of Treasury bills for Monday, depending on whether or not the debt limit is lifted.
The auction would take place on June 5, when the government expects to run out of money without a debt deal.
If Congress acts in time, $65 billion in 3-month bills and $58 billion in 6-month bills would be sold.
The Treasury Department has scheduled a Treasury bill auction for June 5, but it would be postponed if the United States fails to resolve the debt ceiling crisis by then.
For now, the Treasury plans to sell $65 billion in 3-month bills and $58 billion in 6-month bills on Monday and settle them on June 8.
But their sale won’t happen if Congress doesn’t approve the debt cap bill by then, because the Treasury wouldn’t be able to issue such securities under the limit. current debt.
Normally, the Treasury Department communicates on Thursday the amount of three- and six-month bills to be sold the following Monday. However, this week it said such an auction was “tentative” and “conditional on the enactment of the debt ceiling suspension”.
It’s like Treasury Secretary Janet Yellen estimated that June 5 would be the most recent X date, or the day the United States would run out of funds if Congress didn’t raise the country’s borrowing limit.
After a tumultuous back-and-forth through May, Republican House Speaker Kevin McCarthy and President Joe Biden managed to hammer out a deal over the weekend to lift the debt ceiling through 2025.
However, the possibility of a default is still on the table, as the bill must be approved by both houses of Congress. Although it was recently passed by the House of Representatives, the Senate only has a few days left to vote on it.
Meanwhile, the government continues to run out of cash. As of Tuesday, the Treasury’s general account held about $37 billion, after holding $140 billion in mid-May. The cash reserve is at its lowest since September 2017, according to Bloomberg.
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