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POSTED ON February 8, 2023  - POSTED IN Exploring Finance

Despite hitting the debt ceiling, the US Treasury managed to add $35 billion in new debt during January.

The Treasury has employed extraordinary measures, including exchanging Non-Marketable (e.g., Government employee retirement funds) and other forms of debt for short-term Bills. The balance on Bills grew by $241 billion which was the largest single-month growth since at least January 2021.

POSTED ON January 8, 2023  - POSTED IN Exploring Finance

The US government has once again run up against the debt ceiling. Meanwhile, interest payments on the debt keep growing.

The Treasury only added $6B of debt in December, allowing short-term debt to mature and replacing it with longer-term debt. This makes sense as long-term rates are below short-term rates with the inverted yield curve.

POSTED ON August 5, 2022  - POSTED IN Exploring Finance

The Treasury increased the total debt by $27B in June. Activity slowed in the latest month across all instruments, but particularly the conversion of short-term to long-term. After massive moves to extend debt maturity and shrink short-term debt by $530B over 4 months (shown below by the large negative turquoise bars), July went very quiet.

POSTED ON May 6, 2022  - POSTED IN Exploring Finance

The Treasury reduced the total debt by $27B in April. This is not atypical since Tax Day falls in April. In April 2016 and 2018, the debt shrunk $78B and $21B respectively. April 2017 and 2019 were both flat due to a debt ceiling saga. 2020 and 2021 were exceptions because the tax deadline was extended.

POSTED ON December 31, 2021  - POSTED IN Exploring Finance

While on the surface, it appears the Federal Reserve asset purchase taper has started, it’s not as easy to prove when you dig into the details.

The Fed is certainly not being as aggressive as they promised, and for good reason. As the Fed leaves the bond market, who will fill the gap? Since 2019, the Fed has quadrupled the Treasury purchases of international holders and has been one of the biggest players in the Treasury market.

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