The imminent return of the U.S. debt ceiling is causing angst for money-market traders once again.

While the risk that Uncle Sam might default by missing a payment on a bill or two is minuscule, investors are wondering whether and how the Treasury can slash its giant cash pile to the level the department has indicated would be consistent with its policies and the 2019 act that suspended the limit. And they're concerned about the impact that any moves could have on short-term funding markets, which underpin much of the global financial architecture.

The Treasury Department has indicated it would reduce its cash balance to $450 billion by July 31, when the debt cap's suspension ends. The reason for this is to prevent the Treasury from building up a cushion ahead of a suspension. But it's unclear whether the government is on track to reach its target from a current balance of $700 billion—or what will happen if it fails to do so. Indeed, projections by financial research firm Wrightson ICAP indicate that the cash balance will be above $450 billion at the end the month.

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