SFP

Robin Harding

Here’s a what a rise in the debt limit after a six month impasse looks like in accounting terms:

Debt subject to the limit rose by $238bn yesterday as the Treasury replenished all of the trust funds it has been borrowing from for the last few months. That leaves it with $162bn of headroom. 

Robin Harding

Some commentators have their knickers in a twist about the rise in the monetary base since February. The reason for it, of course, is that the Treasury has suspended its Supplementary Financing Programme in in order to buy time for Congress to raise the debt limit. The correlation between the SFP and bank reserves (and hence monetary base) is very clear.