Impending Treasury Bill Issuance: Potential Impact on Stocks and Market.
The US Treasury is set to issue an estimated $1tn of Treasury bills in the coming months as part of the latest debt-ceiling resolution. However, analysts at CreditSights believe the heavy supply of fresh Treasury debt will not necessarily derail stocks or the broader market. The S&P 500 index rose almost 5% over a six-month stretch in 2016 and 2018 when a wave of Treasury supply hit the market. The team found that a large amount of T-bill issuance is not necessarily a reason for a broad risk-off shift across markets on its own.