Concern that the US Treasury may delay debt payments next week pushed yields on short-term bills to new peaks on Thursday, as traders and investors sold down their holdings ahead of a crucial vote in the House of Representatives.
With uncertainty still surrounding the prospects of a congressional agreement to lift America’s borrowing limit by August 2, Wall Street’s leading chief executives wrote to President Barack Obama and lawmakers to warn of the “very grave” consequences of a default and urged the politicians to cut a deal “this week”.
The yield on the bill that matures on August 4 , which returned no interest earlier this month, rose to 20 basis points. In a rare “inversion” of the short-term yield curve, it was deemed more risky than the bill maturing in three months’ time, which now yields 7 bps.