Janet Yellen reiterated yesterday that the Treasury X-Date would be early June. This could even happen as early as the 1st of the month. " All the worst parts of scripture. Yellen's assessment of the X Date is also likely correct. Joseph Abate, Barclays rates strategist and money market expert, has a monthly update that is in line BBG's conclusion. Abate believes that the Treasury could run out of cash or extraordinary measures capacity within the statutory borrowing limits between June 4 and 12 according to Abate. Abate reported in the monthly report that 'the Treasury was able restock its extraordinary measure (from the G Fund) in May and will receive another $140bn of extraordinary measure capacity by June 30'. The two other banks are also in agreement: According to Deutsche Bank's strategists, the base case is an early June X-date with late July as the optimistic scenario. Meanwhile, Jay Barry of JPMorgan concluded that Treasury would exhaust all resources by June 7, which was slightly earlier than the previous estimate of June 9; Bloomberg calculated that, even though the Treasury Department has made it clear it is not planning to prioritize payments and will refuse to do so if forced to, the government could have a surplus up until March 2024 if it immediately reduced total spending by 25 percent starting on June 1. Remember, the US cannot default. Tax receipts will cover all debt maturities as well as interest. The 25 million government/deep state employees and Ukraine wire transfers might not be as lucky.
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