TROUBLING TREASURIES

Pre-Covid, quarterly Treasury bond issuance, including new and mostly refinanced maturing debt, was $3 trillion/quarter. Since then, the deficit has jumped, and Treasury has increasingly relied on short-term debt to finance the government. Thus, quarterly Treasury issuance in 24Q1 was $7.2 trillion, breaking the previous 20Q2 record by a nose, and is likely to remain elevated. This and high short-term rates are quickly raising government interest expenses.