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I'm investing in treasury bills directly through the treasury and was wondering how the government shutdown affects those bills. Will they still be auctioned? Has a government shutdown in the past affected the yields?

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  • Given that issuing treasury bonds results in net revenue, it would be quite odd for them to be shut down for lack of funds. Jan 22, 2018 at 21:00
  • @Acccumulation: the shutdowns aren't due to lack of actual money, they are due to lack of legal authority to spend (technically, obligate) money, called appropriations. It is the debt limit, an entirely different problem which also pops up from time to time, that represents actual lack of cash. Welcome to the world of government accounting. Mar 1, 2018 at 2:44
  • @dave_thompson_085 The shutdown of government functions is due to those government functions not having money. You do have a point that government functions not having money is due to the government not allocating money to those functions, rather than the government not having money to give to them. And the debt limit doesn't prevent obligating money, it just prevents fulfilling those obligations.Spending bills and bills that raise the debt limit are separate. And if issuing treasury bonds were shut down, that would effectively set the debt limit at zero. Mar 1, 2018 at 16:55

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Treasury bonds will probably still be issued, as the departments in charge of that sort of thing will be deemed essential and will not have funding completely cut. I can't find any resources that say this explicitly, but it is was I would expect.

A government shutdown will effect the yields. Through my research it appears they will rise, but the likelihood of the US being downgraded from a AAA credit rating (and thus yields jumping a lot) is close to zero.

This article from CNBC talks about the rise in yields on T-Bonds as the government tries to solve the issue.

Another article from CNBC covers the potential credit rating downgrade.

Finally, this article from Fortune covers the shutdown more broadly and talks about some of the consequences of the shutdown.

Hope this helps!

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