March T-Bills in Focus as Budget, Debt Limit Set to Collide

Congressional leaders faced with the expiration of current spending authorizations at the end of the week released a stopgap spending bill to keep the government operating through Feb. 16. That would bring the next deadline to avert a government shutdown perilously close to the Treasury’s so-called drop-dead-date to avoid a default, which experts forecast may be as soon as early March.

Wrightson ICAP economist Lou Crandall on Tuesday pulled forward his forecast for when America will exhaust it’s borrowing capacity to early March, saying the Treasury’s latest monthly statement of the public debt shows “much less remaining headroom” at the end of December than initially projected. That may limit the amount the government can borrow in the coming weeks, potentially forcing the Treasury to cut short-term bill auctions further. It has already scaled back the size of its one-month bill sale, lowering it by $5 billion this week to $45 billion.