Rising Treasury Bill Issuance When the debt ceiling was suspended in mid-2023, the Treasury was faced with an urgent need to rebuild its depleted Treasury General Account (TGA). It immediately looked to the T-bill market, issuing hundreds of billions in new bills in a matter of months. In the two years since, the share of T-bills in marketable Treasury debt has expanded from roughly 16–17% to around 22% today. More specifically, outstanding T-bills have grown from $4.47 trillion in mid-2023 to $6.59 trillion by October 2025, a 45% increase. In several recent auction cycles, bills have accounted for the majority of new issuance, underscoring the Treasury’s increasing reliance on short-term funding to meet elevated borrowing needs.
There are several forces driving higher T-bill issuance:
1. Flexible financing tool Coupon auction sizes had already grown substantially and could strain investor demand on the long end of the curve. Bills offer the Treasury greater flexibility in managing short-term funding needs without pressuring coupon markets.
2. Rebalancing toward the Treasury’s preferred maturity structure The TBAC has repeatedly noted that the bill share of total outstanding debt should fall between 15% and 20% for optimal liquidity and rollover risk management purposes. After falling below this range during the pandemic, the bill share is now moving back toward target. In 2024, the TBAC also acknowledged that the T-bill share could run above 20% for some time, given demand and financing needs.
3. Persistent deficits and refinancing needs It is no secret that the fiscal outlook for the US necessitates sustained borrowing requirements over the next several years, even with the help of tariff revenues to lower borrowing needs (and even that remains in limbo). With limited room to raise coupons aggressively, bills will absorb much of the incremental financing load.
5 | ADMISI - The Ghost In The Machine | Q4 Edition 2025
45% increase
October 2025 Mid-2023
$4.47 trillion $6.59 trillion
RISING T-BILL ISSUANCE IS DRIVEN BY THEIR FLEXIBILITY AS A FINANCING TOOL, A STRATEGIC MOVE TO REBALANCE DEBT MATURITY STRUCTURE, AND ONGOING FISCAL DEFICITS REQUIRING SUSTAINED BORROWING.”
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