US Treasuries contend with debt ceiling déjà vu

Extraordinary funding measures are running out, and concerns are evident in Treasury yields

Time to read: 2 min

The so-called “extraordinary measures” that are currently being used to fund the US government are projected to run out in early March. With this “drop-dead” date quickly approaching, it appears that the Treasury bill market is already reacting to the potential disruption. Below I answer some frequently asked questions about the debt ceiling, extraordinary measures and the impact on Treasury markets.

When is the government likely to run out of funds?


Debt ceiling saga faces important deadline

Without a deal by Dec. 8, ‘extraordinary measures’ will begin, with potential impacts for the US Treasury market

Time to read: 2 min

Tomorrow, Dec. 8, is an important date on the legislative calendar. As discussed in my last blog, the three-month suspension of the debt ceiling is set to expire on Dec. 8, after which the US Treasury will likely undertake “extraordinary measures” to fund itself. Invesco Fixed Income believes these legal stopgap measures would allow the government to meet its obligations over the next few months, and that is why we believe the Treasury market has, so far, reacted calmly to the upcoming deadline.

Dec. 8 is also the due date for another important legislative decision —


Debt ceiling saga: Skipping ahead to the next chapter

We contemplate what happens next if the government can’t reach a deal before Dec. 8

Time to read: 3 min

The Treasury market received a reprieve in September when the White House and Congress agreed on legislation coupling hurricane relief funding with a suspension of the debt ceiling until Dec. 8.1 The agreement puts off a potentially contentious political debate and keeps the government funded until at least year-end. However, markets have now turned their focus to December and beyond. What should we expect to see in the Treasury market if a new debt ceiling deal can’t be reached by then?

September’s agreement calmed the markets — for now


The US debt ceiling saga returns

US short-term bond markets could be choppy as Congress seeks to resolve the looming issue

Once again, the US debt ceiling is in focus. Since March, the US Treasury has been employing “extraordinary measures” to fund the US government, such as halting contributions to certain government pension funds and borrowing money set aside to manage exchange rate fluctuations. But those measures are expected to run out this fall.