Bessent Trying to Undo Yellen’s Poor Debt Management

Current Trends

The government hit the debt ceiling back in January and has been pursuing extraordinary measures since. This usually means dipping into things like Civil Service Retirement funds to free up cash and avoid borrowing any more money.

As the chart below shows, the debt balance has been pretty much net neutral for the last 6 months. One other really important thing to note is that Bessent is slowly working on undoing some of the damage that Yellen did when she pushed a ton of debt into short-term. A lot of the short-term debt has been rolling off for Notes which are typically in the 2-10 year range.

Note: Non-Marketable consists almost entirely of debt the government owes to itself (e.g., debt owed to Social Security or public retirement)