The impending barrage of T-bills is a precursor to a glut of longer-term debt issues, which might result in a "demand vacuum" for longer-maturity bonds that pushes yields higher and tightens financial conditions.
After Jerome Powell told the House Financial Services Committee that the Fed might keep raising interest rates, the gap between yields on 2-year and 10-year Treasuries—which has inverted before each of the past five U.S. recessions—reached the largest inversion since March.
The unexpected surge in May, combined with growth in applications to build, adds to evidence that residential real estate is recovering after a yearlong slump.
Corporate treasurers in companies at all points on the credit-rating spectrum are coping with more than a year of interest rate hikes by cutting costs and paying down debt.
