HALISTER1: Treasury May Cut Bill Supply as Debt Limit Low Priority: BofAML

Treasury May Cut Bill Supply as Debt Limit Low Priority: BofAML

(Bloomberg) -- A Republican sweep of U.S. election only “marginally reduces” risk that the debt limit will bind on March 16, though Treasury can use extraordinary funding measures to “stave off a default until around mid-summer,” BofAML strategist Mark Cabana said in note.
  • Once Trump is inaugurated Jan. 20, debt limit may be a “low priority” since there won’t be an “imminent default risk”
  • Treasury will need to reduce cash balance to $23b by March 15 from $390b, year-end projected level, which may result in a “meaningful reduction in bill supply”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Mark Cabana (Bank of America Corp)

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