Morgan Stanley says that with the signing of the debt deal the US Treasury will issue a huge rollout of T-bills, which could see bank deposits come under pressure all over again:
- MS sees circa US$1.36 trillion of net T-bill issuance over the rest of 2023
- $1 trillion of that is to be issued in the coming 4 month
- suggesting circa $450b of gross outflows over the next four months
Morgan Stanley's fixed income team says it anticipates that money market funds are unlikely to be major buyers of T-bills, and a slowing of deposits:
- “A re-acceleration of deposit outflows would end the current intra-quarter bank stock bounce”
