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Morgan Stanley with the note.
In 2011 and in 2013, the US government approached the statutory debt limit, with Congress raising the limit only at the last minute. The closer we got to the so-called “X-date,” the more markets reflected the tension.
The Treasury ran down the amount of Treasury bills outstanding to stay under the limit and, as a result, bills were scarce and went up in price and down in yield…except for those maturing around the X-date, which cheapened as markets avoided them.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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