Sovereign/Government
Most analysts believe this demand for 1-month T-Bills is due to the impending debt-ceiling “showdown” in Washington, D.C. (from Barron’s on April 21)…
Federal tax receipts due April 18 have come in weaker than expected, which could result in the government running out of money before the middle of June unless Congress raises the debt ceiling. That has prompted strong demand for one-month T bills, which mature before the potential default. The T-bill due on May 23 fell
However, some analysts – most notably Jeffrey Snider, Chief Strategist for Atlas Financial and co-host of the popular Eurodollar University podcast – disagree. Snider believes this move is actually indicative of a shortage of high-quality collateral in the global financial system (via Twitter on April 22)…
You can watch Snider’s detailed video explanation of this issue right here.