While negotiators in Washington struggle to reach a deal on the statutory debt limit that will be amenable to both sides of politics, the Treasury’s cash balance is rapidly dwindling and the amount of the account balance that it is responsible for Decreasing credit limit keeps a trick up its sleeve to avoid a breach.
The Treasury’s cash balance fell to $38.8 billion as of Thursday, the lowest level since 2017, according to data released Friday. That was down from $49.5 billion a day earlier and $140 billion on May 12. The Treasury Department’s bank accounts have been under downward pressure recently as steps are being taken to avoid breaching the $31.4 trillion debt ceiling.
Meanwhile, the so-called extraordinary measures used by Treasury Secretary Janet Yellen to avoid borrowing limits have also been exhausted. As of May 24, the Treasury had only $67 billion left in special measures, the department said in a statement Friday. That brought the total available authorized measures to $335 billion, down from about $92 billion on May 17.
Treasury Secretary Janet Yellen has warned that the government could run out of money as soon as early June. But there are signs that Republicans and Democrats are making progress toward a deal in Washington, though a deal has yet to be reached.
Premium investors seeking to hold US paper, which has the most risk if Congress and the White House fail to strike a deal, continued to retreat on Friday, with yields falling below 6%.