NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

Treasury’s $776 Billion Q4 Borrowing Strategy Amid Rising Interest Rates

Published 01/11/2023, 14:34

Wall Street is closely monitoring the Treasury Department's forthcoming routine quarterly "refunding" announcement, as interest rates continue to rise rapidly. The Department plans to release increased short-term debt later this month, a move designed to offset the surge in government spending and interest payments. This strategy forms part of an unprecedented $776 billion borrowing plan for the fourth quarter.

The heightened focus on the Treasury's decision comes in response to surging rates that are driving up the cost of government debt. The benchmark 10-year Treasury yield, which represents the cost of government borrowing over a decade, has risen by three-quarters of a percentage point since the last update on the borrowing plans in early August.

An industry advisory group supports this approach, suggesting it could help ease pressure on long-term bonds that impact commercial interest rates. The group's backing underscores the importance of managing both short and long-term borrowing costs amidst an environment of rapidly increasing rates.

The Treasury's decision to increase short-term debt issuance is seen as a critical move to balance soaring government spending and interest payments. As such, Wall Street and industry experts will be keenly awaiting further details on this strategy in the upcoming "refunding" announcement.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.