Clouded Judgement: Upcoming Liquidity Crunch from Treasury Bill Issuance

The article analyzes the macroeconomic liquidity implications of the recent debt ceiling deal, arguing that the government's need to issue $1T+ in Treasury bills to refill the Treasury General Account (TGA) could create a significant liquidity drain on financial markets. The author traces how pandemic-era QE and fiscal stimulus injected liquidity, followed by QT and higher rates that have been partially offset by TGA drawdowns, but this offset will disappear as the TGA is replenished through massive bill issuance.