The Treasury announced today that its 4 week bill will be $35 billion instead of $23 billion as forecast just last week by the TBAC. That’s $12 billion of the extra cash I was expecting the Treasury to need to pay its bills this week. It reduces the scheduled paydown (cash back to bill holders) at Thursday’s settlement from $20 billion to just $8 billion. A cash management bill could take that down to zero. That cash would have come in handy to help stabilize the markets. Now it won’t.
I still think they need at least another $8-10 billion to pay all the bills and have at least a few billion cushion at the end of the week.The Fed could allow them to kite that on their checking account. They apparently did so last week. You know what they say. “Desperate times call for disparate measures.”
Details coming up later today in the Fed report.
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