The bulge in Treasury offering net supply issuance in the wake of the suspension of the debt ceiling, is starting.
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The US Treasury today announced $90 billion in 4 and 8 week bills to be auctioned Thursday. That includes $20 billion in net new supply to start raising the cash they need to repay the accounts they raided under the debt ceiling.
Commissar Trump signed the Rump Congressional deal to suspend the debt limit last week. Hundreds of billions in Treasury offering net new supply are coming within weeks. While that will eventually moderate some, the supply deluge will stretch as far as the mind can see, and beyond.
The new bills announced today settle August 13. Then $26 billion in net new coupon debt will settle August 15.
The pressure of new Treasury supply on the market will be relentless. We have known ever since the debt ceiling was imposed in March that this day would come and that it would be bad news for the stock market.
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