Treasury may postpone 3-and-6-month bill sales next week

The US Treasury DepartmentTreasury Department is considering postponing its regular three-month and six-month bill auctions, tentatively scheduled for Monday, if constraints around the statutory debt limit remain.

Ordinarily, the department would have announced the size of the upcoming week's three- and six-month benchmark bill sales on Thursday and they would be sold the following Monday. Instead, it said it is only tentatively planning to hold next week's three - and six - month bill sales next Monday.

The government may run out of cash if a legislative fix on the debt ceiling isn t implemented next Monday.

Treasury said that it is tentatively announcing its intent to auction $65 billion of 13-week bills and $58 billion of 26-week bills on Monday, but that these announcements are conditional on enactment of the debt limit suspension because Treasury forecasts insufficient headroom under the current debt limit to issue securities in these amounts on the day they are set to be issued.

The Treasury said it could postpone these auctions if Congress has not passed pending legislation in time and that it will provide further updates regarding the announcement of these auctions by 10 a.m. ET on Monday, ET onwards.

The decision comes amid clear signs that the Treasury's cash and borrowing situation is getting more straitened.

The cash in its coffers shrank to just $37.4 billion on May 30, the most since 2017 at this time. The department has also been gradually exiting the various accounting gimmicks it uses to stay within the $31.4 trillion debt cap. It announced this week the availability of $1.9 billion in so-called exceptional measures from a complicated debt-swap maneuver with the Federal Financing Bank, but even with that, the situation appears to be tight.

The three-month and six-month sales, if they proceed, will however be bigger than the most recent ones at those tenors as the Treasury seeks to ramp up its cash balance again - presuming a debt-ceiling fix is implemented by then.

The House of Representatives on Capitol Hill passed the debt limit bill forged by President Joe Biden and Speaker Kevin McCarthy that would limit government spending through the 2024 election, and abolish the ceiling until 2025. The deal will now be decided by the Senate, where approval is virtually certain and the only question is timing. Senate Republican leader Mitch McConnell said the measure could get a vote as soon as Thursday, days ahead of the June 5 default deadline.

None of Goldman CEO Loves Summer Camp So much He s Expanded His Portfolio.