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Treasury General Account: Difference between revisions
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== Developments == | == Developments == | ||
=== After Debt Ceiling Deal === | === After Debt Ceiling Deal 2023 === | ||
Bill supply will exceed a normal pace because the Treasury will want to replenish their Treasury General Account. | Bill supply will exceed a normal pace because the Treasury will want to replenish their Treasury General Account. | ||
Goldman Sachs estimate that the Treasury will try to rebuild the TGA to about $600 billion or $700 billion of a standing balance. On top of the normal issuance used for normal government spending, the market’s estimates are actually a little bit above $1 trillion of bills, maybe up to $1.2 trillion of bills, to come. | Goldman Sachs estimate that the Treasury will try to rebuild the TGA to about $600 billion or $700 billion of a standing balance. On top of the normal issuance used for normal government spending, the market’s estimates are actually a little bit above $1 trillion of bills, maybe up to $1.2 trillion of bills, to come. The timeline of that supply is over the six months after the debt limit is raised, and it may sell up to $700 billion in T-bills to rebuild its coffers withing six to eight weeks of a debt deal.<ref>https://www.goldmansachs.com/intelligence/pages/as-debt-limit-talks-intensify-the-us-may-have-to-quickly-raise-1-trillion.html</ref> | ||
The Tresuary schedule confirm this, as they expect a cash balance of $600 billion at the end of september. <ref>https://home.treasury.gov/system/files/136/Sources_Uses_Apr_2023.pdf</ref> | |||
Before the approval of the debt ceiling deal, the tresuary had to drawdown its cash balance to almost zero, according to analyst this move ofset the QT by the FED, and its one of the reasons the stock market had a rally in the first half of 2023. | |||
After the debt ceiling deal is signed, analyst has now expressed worry about the liquidity drain it will mean to rebuild the TGA, combined with the normal QT the FED is doing. It will be like a double negative for liquidty, while before the event it was like a null effect between the two. | |||
Different Scenarios it could play out? | |||
== References == | == References == | ||