T-Bills trade higher in the repo markets as uncertainty takes hold

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Uncertainty surrounding the US debt ceiling is making US T-Bills trade more expensive in the repo markets.

Uncertainty regarding the debt ceiling discussions in the United States of America is causing certain T Bill issues to become more expensive in the repo markets. Those T-Bills that mature close to the expected debt ceiling X-date (the date when the US Treasury is unable to pay its bills), currently assumed to be June 1st, 2023, are trading more expensive with higher-than-average haircuts.

Longer dated T-Bills are also trading more expensive as market participants start to hedge exposures and look to position their books against both positive and negative outcomes. The UST-Bill 11/30/23 and the UST-Bill 12/28/23 are currently trading above SOFR (5.056444 May 17th).

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.