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"Friday’s trading marked a repeat of debt-ceiling showdowns in 2011 and 2013. Both times, yields on bills maturing around the debt-ceiling deadline spiked before falling once legislators agreed to increase the national borrowing limit.“The default risk is almost zero,’’ said Stanley Sun, interest-rates strategist at Nomura Securities International in New York. “We have seen this movie many times before. The question here is how long the suspense is going to be this time.”Bills are government debt that matures in a few weeks to a year. Buyers such as corporations use bills as a safe place to stash money that they don’t want to tie down for longer. Tighter regulations after the financial crisis have raised demand for bills among money-market funds and banks.Few believe the U.S. would default on its debt, which is the world’s safest and most liquid, or easily tradeable, debt instrument. Analysts say the issue is that a political stalemate could delay payments from the Treasury, a reason why investors typically cut exposure to bills maturing around the deadline to avoid unwanted hassles, especially for investors who need the payments during that period."
"Friday’s trading marked a repeat of debt-ceiling showdowns in 2011 and 2013. Both times, yields on bills maturing around the debt-ceiling deadline spiked before falling once legislators agreed to increase the national borrowing limit.“The default risk is almost zero,’’ said Stanley Sun, interest-rates strategist at Nomura Securities International in New York. “We have seen this movie many times before. The question here is how long the suspense is going to be this time.”Bills are government debt that matures in a few weeks to a year. Buyers such as corporations use bills as a safe place to stash money that they don’t want to tie down for longer. Tighter regulations after the financial crisis have raised demand for bills among money-market funds and banks.Few believe the U.S. would default on its debt, which is the world’s safest and most liquid, or easily tradeable, debt instrument. Analysts say the issue is that a political stalemate could delay payments from the Treasury, a reason why investors typically cut exposure to bills maturing around the deadline to avoid unwanted hassles, especially for investors who need the payments during that period."
[text] Like Before, T-Bill Yields are Spiking Over Potential Delay in Interest Rate Payments if Congress Does Not Raise Debt Ceiling Soon - WSJ
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