Close to a third of all outstanding U.S. government debt is set to mature in the next 12 months, raising questions about where Treasury might go from there to finance the government’s borrowing needs.
Concerns about Treasury’s increased issuance of T-bills and the potential for volatility or market disruptions emerged following the debt-ceiling fight in May, when angst over the government’s ability to pay all its bills pushed yields above 7% on debt maturing in early June. Even with modest coupon increases, the T-bill share of outstanding debt was expected to rise above 20% going forward, the top of TBAC’s recommended range. Though the advisory group said it was comfortable with running a bit above 20% for some time, it also recommended that Treasury take steps toward normalizing that level over time.