There has been a reduction in the fear premium being baked into Treasury bills that are most at risk if lawmakers fail to resolve the debt-ceiling crisis. But anxiety remains elevated as Democrats and Republicans continue to wrangle over the borrowing limit and the window for reaching a deal continues to narrow.
Yields on securities due in early June — the period in which Treasury Secretary Janet Yellen has warned the US might run out of borrowing capacity and be unable to make payments — slipped back Thursday after reaching levels above 7% the previous day. The yield on those maturing June 1 dropped by more than a percentage point below 6%. That move came as comments from lawmakers gave reassurance to those optimistic that an agreement will be reached.
