The gap between 1 month and 3 month Tbills has never been this wide. This gap opened up over the past month.
The debt ceiling impasse is likely to occur within that gap, but this type of gap didn’t open during prior debt ceiling debacles, and so some analysts argue it’s more of a collateral shortage issue.
What does this mean to you lyn?
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It is because of the debt ceiling. People want to hold treasuries that mature before the debt ceiling is hit. This increases the price resp. lowers the interest rate.
