The U.S. Treasury cash holdings with the Fed was $1.866 trillion as of December 30th. The Treasury now expects to borrow $274 billion in January through March, some $853 billion less than the previously projected in November, when it expected to borrow $1.127 trillion. The Treasury announced its cash balance estimate for the end of March as $800 billion. For the three months through June, the Treasury anticipates borrowing $95 billion through net new marketable debt issuance, assuming a cash balance of $500 billion at the end of the period. What would be the effect of this news on market price of different asset classes? How would you change your portfolio decision?

Answer rating: 100% (QA)

The news of the reduced borrowing by the US Treasury would have different effects on dif... View the full answer