The Impending Debt Ceiling Crisis: What It Means for the US Economy.

The resolution of the US debt-ceiling fight is expected to lead to a flood of Treasury bill issuance, with new bill issuance estimated to reach about $1.4tn through the end of 2023. Money-market funds, which have climbed to nearly $5.4tn in assets managed since the regional banking crisis erupted in March, are expected to be a key buyer of the bill supply. However, the bills may need to exceed the roughly 5% rate offered by the Federal Reserve's reverse repo facility by about 10-20 basis points to attract buyers. The 1-month Treasury yield rose to almost 5.6% on Tuesday, while the 3-month yield was 5.3%, according to FactSet.