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FrankSavage
  |     |   45 posts since 2017

https://www.treasurydirect.gov/instit/annceresult/press/preanre/2023/SPL_20230607_1.pdf

Discussion focuses on initial increases in bill issuance focused on shorter terrm securities and cash management bills, and the introduction on June 8 of regular weekly 6-week CMB's.

With increases in bill issuance, my question is where will the funds come from to make these purchases. The obvious answer to me, at least for individual investors (and probably institutional investors) is that funds will come from deposit savings or money market accounts. To remain competetive I think it is likely that Treasury will have to increase yields to promote investments over bank yields. If Treasury attracts funds now in money market or deposit accounts, this outflow may in turn cause banks to increase rates to counter the loss of deposits. One way or the other it will be very interesting to see how this develops.



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