The Impending $1 Trillion Treasury Debt Deluge and Its Impact on Stocks.

The US government is expected to borrow around $1 trillion by the end of September, which could lead to rising interest costs and drain money from the financial system. The borrowing spree is set to pull cash from banks and other lenders into Treasury securities, amplifying the pressure on already stressed regional lenders. The deluge of Treasury debt also amplifies the effects of another Fed priority: the shrinking of its balance sheet. The Treasury’s cash rebuild could push borrowing costs higher, exacerbating worries among investors and depositors.