Larger US Deficits Pave the Way for Even More Treasury Bills

US fiscal deficits are projected to grow over the next decade, likely pushing the government to increasingly rely on Treasury bills and healthy demand to plug the holes.

The nonpartisan Congressional Budget Office last week upped its deficit estimate for 2024 to almost $2 trillion from about $1.6 trillion in February, signaling a higher threshold for federal borrowing. Total deficits are expected to equal or exceed 5.5% of GDP in every year from 2024 to 2034, it said.

Those latest projections sounded the alarm on Wall Street, prompting analysts to revise trajectories for bill sales. While Treasury is well funded ...