Bumpy road ahead

There’s also a deluge of liquidity in the system due to the Federal Reserve’s asset purchases, inducing the central bank to lift key rates last month to help control its benchmark.Strategists will be eyeing tomorrow’s release of minutes from that gathering for potential new insights on officials’ views on that matter.

NEW YORK: Short-term rates traders are girding for a bumpy road ahead, as the US debt ceiling looks poised to return on Aug 1 while Congress so far has no clear plan to increase it – meaning federal government borrowing could soon get tricky.

Toward the top of the list of worries among traders: the US is likely to reduce issuance of bills – which are already in short supply as investors scramble for places to park cash – because the Treasury Department needs to dramatically reduce its cash balance this month.