Debt-Ceiling Standoff Distorts Short-Term Treasury Market

The U.S. debt-ceiling standoff is skewing investor preferences for different types of Treasurys.

Investors are demanding more yield to hold some short-term Treasurys with the greatest risk of delayed payment. Meanwhile, they are driving down yields on a dwindling supply of others, with the Treasury Department slowing short-term borrowing to push off hitting the ceiling.