Treasury's Tactical Move: Averting Debt Default

The U.S. Treasury has taken extraordinary measures to delay breaching the federal debt limit by suspending G Fund reinvestments, extending borrowing capacity by $300 billion. Acting Treasury Secretary David Lebryk calls for congressional action while nominee Scott Bessent awaits confirmation amid ongoing debt ceiling negotiations.

The U.S. Treasury Department has implemented another extraordinary measure to prevent breaching the federal debt limit. By suspending daily reinvestments of the Government Securities Investment Fund, known as the G Fund, the move liberates approximately $300 billion in federal borrowing capacity.

In a letter to Congress, acting Treasury Secretary David Lebryk explained that the decision was necessary as the $36.1 trillion federal debt ceiling remains unaltered. Meanwhile, Treasury has also paused investments in certain government employee benefits funds.

The situation presents an early test for Trump's Treasury secretary nominee, Scott Bessent. Awaiting Senate confirmation, Bessent expressed willingness to collaborate with Congress and the White House to potentially eliminate the debt ceiling if directed by President Trump.

(With inputs from agencies.)