Desperate times are calling for desperate measures at the Treasury Department. For the first time since 2007, the department is set to auction $15 billion worth of one-day cash management bills on Friday that will be issued on June 5. This comes as the Treasury’s cash balances hover around $37 billion, the lowest level since 2017. Since the debt ceiling was initially breached in January, the Treasury hasn’t been able to borrow more money to pay its bills.
Over the past 25 years, the Treasury held six one-day cash management bill auctions. Yields on cash management bills, which are determined by the auction process, tend to be higher than regular fixed maturity bills. On Thursday, the Treasury auctioned $25 billion of three-day cash management bills yielding 6.15%. That exceeds the yields almost all other Treasury bills are trading at. Friday’s auction is open to the public with a minimum $100 bid and can only be purchased in $100 increments.