Douglas Rissing
One Big Beautiful Bill Act
On July 4th President Trump signed into law the One Big Beautiful Bill Act (OBBB).
This bill is the signature legislation of the President’s second term which encompasses his tax and spending
Debt Ceiling Increase Will Allow U.S. Treasury To Resume Borrowing
Summary
- The One Big Beautiful Bill Act raises the debt ceiling by $5 trillion, averting a 2025 debt crisis and enabling continued government funding.
- Treasury will prioritize short-term Treasury Bill issuance over longer-term bonds, aiming to replenish cash reserves without pushing up long-term rates.
- This "Activist Treasury Issuance" approach acts as stealth QE, potentially suppressing long-term yields but raising concerns about future inflation risks.
- Bank of America forecasts Treasury Bills could reach 25% of marketable debt, implying $2 trillion in new T-Bill issuance over the next year.
Michael Gray has devoted his career to following the capital markets and managing fixed income assets. He founded Gray Capital Management LLC and before that was Head of Taxable Fixed Income at Fidelity Investments. Michael has an MBA in Finance from Wharton and a BA in Economics from Union College.
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