Quick Take
- The U.S. Treasury General Account (TGA) continues to be depleted; as of May 24, it had just $49 billion left in its coffers.
- This is the lowest number in the account since 2017 when the balance fell to around $23 billion.
- The Treasury’s General Account is the primary operating account for the United States government that services daily expenses.
- Treasury yields continue to rise and have been nine out of the ten past trading sessions, according to MacroScope.
- House Speaker Kevin McCarthy believes an agreement on the debt ceiling will be reached, and negotiations will continue “24/7 to solve this problem”, according to MacroScope.
- Once an agreement is reached, the TGA will draw liquidity from the system and issue new bonds to refill the account.
- Blake Davis, a macro analyst from Blockware Solutions, argues that this will cause a severe liquidity crisis on top of the Fed’s continuing quantitative tightening.
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