On April 20, the market was still uncertain whether the United States could avoid a debt default by the end of the summer, as the latest data showed that the inflow of cash into the Treasury Department on the tax deadline was not significant.
Only $108.47 billion in cash flowed into the Treasury on Tuesday. TD Securities strategist Gennadiy Goldberg believes that the money may be enough for the U.S. government to meet its spending, but even if it can pass, it is only a narrow victory.
Data released on Wednesday showed the Treasury’s cash balance rose to $252.55 billion on Tuesday from $144.08 billion a day earlier.
The Treasury’s bank accounts have been under downward pressure recently, with cash balances falling to just $86.55 billion at one point last week as a result of extraordinary measures to avoid breaching the $31.4 trillion debt ceiling.
Bank of America strategists wrote last week that based on historical precedent, an increase in Treasury cash of more than $200 billion after the tax deadline is strong, and anything less than $150 billion is weak.