The US Treasury’s ongoing barrage of bill issuance has left market participants trying to gauge when investors will lose their appetite for short-dated government debt.

Buyers have easily soaked up the $1.56 trillion of Treasury bills issued this year through the end of September, with the bulk coming after the government suspended the debt ceiling in June. But drainage of the Federal Reserve’s overnight reverse repurchase agreement facility, where usage has dropped by over $1 trillion as cash is allocated to T-bills, to the widening gap between yields and overnight index swaps — a proxy for monetary policy expectations — are already raising concerns.

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