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2026-10-31 04:10:24
In a recent research report, JPMorgan strategists Jay Barry and Pankaj Vohra, among others, pointed out that the issuance of US short-term Treasury bills is likely to continue its expansionary trend, with the market needing to absorb a net supply of $991 billion by 2027. The current market focus is on whether subsequent demand can match the increasing supply. "We anticipate this process will encounter many obstacles," the strategists stated in the report. They estimate that the growth rate of assets under management in money market funds will be roughly in line with the levels seen in 2024 and 2025 when large inflows occurred, unless extreme market volatility similar to the widespread impact of the 2020 pandemic or the pressure on US regional banks in 2023 occurs, which could disrupt this growth pace. As a short-term debt instrument issued by the US Treasury, the supply and demand balance of short-term Treasury bills not only affects US short-term financing costs but also has a ripple effect on the global dollar liquidity market. If the supply-demand gap continues to widen, it may further increase the pressure on short-term interest rate volatility.
