US: Johnson Promises To Codify DOGE Cuts After Musk Pans "Big Beautiful Bill"
May-28 15:42
House Speaker Mike Johnson (R-LA) has issued a statement on X promising to codify the findings of Elon Musk’s Department of Government Efficiency. The statement appears a direct response to Musk’s interview yesterday panning the Republican tax and spending bill.
- Johnson: “The House is eager and ready to act on DOGE’s findings so we can deliver even more cuts to big government that President Trump wants and the American people demand.”
- Johnson says the House will do that in two ways: “1. When the White House sends its rescissions package to the House, we will act quickly by passing legislation to codify the cuts. 2. The House will use the appropriations process to swiftly implement President Trump’s 2026 budget.”
- Musk told CBS yesterday: “I was disappointed to see the massive spending bill, frankly, which increases the budget deficit … A bill can be big or it can be beautiful. But I don’t know if it can be both.”
- MNI’s Political Risk team noted in today’s US Daily Brief that Musk’s comments could embolden Republican fiscal hawks, already concerned with the deficit implications of the bill, to take a harder line on spending cuts.
- Several key senators appear to endorse Musk’s position, including Senator Mike Lee (R-UT) who said in response to a Fox News report of Musk’s comments: “This bill isn’t a done deal yet. There’s still time to fix it. The Senate version will be more aggressive. It can, it must, and it will be. Or it won’t pass.”
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US TSYS/SUPPLY: Quarterly Financing Estimates: Watching TGA Cash Levels (1/3)
Apr-28 15:37
This week brings the US Treasury's quarterly refunding process, split as usual into two announcements: the financing estimates for FYQ3 and FYQ4 out later today (3pm ET), followed Wednesday April 30 by the expected coupon auction sizes for the upcoming 3 months (May/June/July) along with associated materials (8:30am ET). Our refunding preview went out Friday - PDF link here.
- Below are MNI's rough expectations of what Treasury will publish as its financing/borrowing requirements today. (Note the new forecasts also take into account the Fed’s taper of Treasury QT to $5B/month from $25B/month).
- The latest financing estimates will show a large jump in borrowing requirements in the current quarter vs previous forecasts, but these figures are deceptive.
- Treasury assumes at all times that that the debt limit will be resolved and when it makes its projections it doesn't account for the significant undershoot in its cash account. The current quarter started with just under $406B in the Treasury General Account vs the $850B penciled in in February's refunding, meaning the cash raise required to refill the TGA by quarter-end will be a very high $444B. (The TGA is currently close to $600B.)
- The Jul-Sep projections should be taken with similar care, as the expected cash raise will be small or zero, but in reality it could be very large if the debt limit is resolved between July and September and Treasury ramps up bill issuance to refill the TGA.
- Overall we regard risks to our forecasts below as skewed to the following: more negative financing need for Apr-Jun (could be closer to -$100B if Treasury is optimistic on April tax receipts and expects a boost from tariff revenues) leading to a lower marketable borrowing requirement (closer to $400B). We do not have any particular bias to the direction of risks for the Jul-Sep forecasts though if pressed could see borrowing requirements/financing needs as being higher.
- Any lower TGA end-quarter target from the expected $850B would lower the financing need and marketable borrowing requirements by the same amount.
FED: US TSY 26W BILL AUCTION: HIGH 4.065%(ALLOT 20.34%)
Apr-28 15:32
- US TSY 26W BILL AUCTION: HIGH 4.065%(ALLOT 20.34%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 30.31% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 9.95% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 59.73% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 2.80
FED: US TSY 13W BILL AUCTION: HIGH 4.200%(ALLOT 3.63%)
Apr-28 15:32
- US TSY 13W BILL AUCTION: HIGH 4.200%(ALLOT 3.63%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 27.21% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 4.24% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 68.55% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 3.10
