August 16: The U.S. Treasury’s reliance on short-term debt is on the rise. Currently, U.S. Treasury bills account for 21% of the market for tradable Treasury securities—nearing the highest level since 2020, when borrowing surged during the pandemic. This figure is far above the 10–15% range observed between 2012 and 2019. By contrast, during the 2008 financial crisis, this proportion reached roughly 34%.
Meanwhile, the U.S. government is becoming increasingly dependent on short-term Treasuries to meet its growing borrowing needs rather than on long-term bonds. If the Treasury continues issuing long-term debt at its current pace before fiscal year 2027, Treasuries would make up 25% of total debt—the highest level since 2004. However, this approach increases the risk that the government will face volatility in short-term interest rates. If rates keep rising—or rise again—debt repayment costs would become harder to bear. The U.S. debt crisis is unfolding in full.
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