U.S. Treasury Dealers Urge Scrapping Of Federal Debt Ceiling

The U.S. Treasury’s primary dealers have urged lawmakers to eliminate the federal debt ceiling, arguing that it raises debt service costs, fuels market volatility, and could undermine the dollar’s role as the world’s reserve currency, Reuters’ David Lawler reported.

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“The Committee expressed that its preferred option would be for Congress to delegate broad authority to the administration to borrow as necessary to fund government obligations,” the Treasury Borrowing Advisory Committee (TBAC) said in minutes from its quarterly refunding meeting.

Yields on Treasury debt rose sharply earlier in April after President Trump announced sweeping "reciprocal" tariffs. Yields later stabilized after Trump paused the biggest tariff hikes—except those targeting China—for 90 days.

Last week, the Treasury announced it will sell $125 billion in coupon-bearing debt next week, raising $30.8 billion in new cash.

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The sale will include $58 billion in three-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds. The Treasury’s borrowing was constrained earlier this year due to the debt ceiling, forcing it to draw down its cash reserves.

The Congressional Budget Office warned in March that the Treasury could exhaust its borrowing capacity and face a potential payment default as early as August 2025.