Biden, McCarthy May Have Agreed On Debt Ceiling But Here's Why A Barrage Of T-Bills Is Bad News For Households
Portfolio Pulse from Bhavik Nair
President Biden and House Speaker Kevin McCarthy have reached a tentative deal on the debt ceiling, leading to an expected issuance of over $1 trillion of Treasury bonds by the end of Q3. This may cause short-term yields to rise, impacting households and businesses as banks increase lending rates.
May 29, 2023 | 1:28 am
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
The iShares 1-3 Year Treasury Bond ETF (SHY) lost 0.43% over the last five days as the market anticipates a surge in Treasury bond issuance.
The tentative debt ceiling deal will lead to a massive issuance of Treasury bonds, causing short-term yields to rise. This will negatively impact the performance of the iShares 1-3 Year Treasury Bond ETF (SHY) in the short term.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The Vanguard Short-Term Treasury Index Fund ETF (VGSH) lost 0.48% over the last five days due to the expected increase in Treasury bond issuance.
The expected increase in Treasury bond issuance following the tentative debt ceiling deal will cause short-term yields to rise, negatively impacting the performance of the Vanguard Short-Term Treasury Index Fund ETF (VGSH) in the short term.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80