20 June 2023
The US national debt has spiked by $572 billion, surpassing $32 trillion. Concerns about inflation and interest rates emerge from fiscal stimulus and deficit spending. The Treasury is selling Treasury securities to replenish its checking account, but deficit spending may outpace tax receipts. Massive bond issuance is necessary to address the budget deficit. The previous drawdown of the Treasury General Account injected liquidity into the markets, while simultaneous quantitative tightening and TGA refilling are now draining liquidity with some lag effects.