Gold and Silver Pull Back — Smart Money Buys When Others Wait 
The massive issuance of Treasury bills is rapidly draining excess cash from the financial system, creating potential liquidity challenges for the U.S. Treasury.
With over $1 trillion in T-bills expected to flood the market over the next 18 months following the debt ceiling increase to $41.1 trillion, the Federal Reserve’s overnight reverse repo facility (RRP) has plummeted from over $2 trillion in mid-2023 to just $182 billion recently.
Money market funds, holding a record $7.4 trillion in assets, are eagerly absorbing the new T-bill supply by reallocating from repos and the Fed’s RRP facility.
However, this dramatic shift raises concerns about what happens when the RRP reaches zero and whether there will be sufficient demand to absorb continued heavy Treasury issuance needed to fund the government’s roughly $1 trillion deficit.
