Stalled beautiful bill drains nations rainy-day fund and things could soon turn ugly for US households

Congress’ dithering over President Trump’s “Big Beautiful Bill” has the potential to make life difficult in the coming months – by possibly spiking interest rates, On The Money has learned.Most Americans don’t appreciate all the ways our elected officials have saddled them with trillions upon trillions of dollars in debt.The national debt stands at around $36 trillion, and needs to go higher to pay for all the stuff the House didn’t cut in passing the buck to the Senate.Until Congress crafts a budget and amends that annoying law known as the debt ceiling, Treasury Secretary Scott Bessent has been tapping something known as the Treasury General Account. The account, known on Wall Street bond trading desks as the “TGA,” is needed to pay short-term bills and acts like a rainy-day fund.It’s like your checking account, except hundreds of billions of dollars larger.However, it’s massively underfunded and in need of cash (aka more borrowing) so the government can keep the lights on – which could mean a nasty spike in interest rates sometime this summer when the selling begins since higher yields will be needed to attract more buyers, according to the smart Wall Street folks at the Bear Traps Report.Bessent has been toying with ways to get banks to hold more treasuries as part of the capital cushion.

Foreign buyers are needed but Trump’s trade war makes it difficult to get saving nations like China and Japan to once again come to our rescue.“The longer it takes for Congress to pass the bill and raise the ceiling, the more Bessent depletes the government’s checking account, and therefore the more money he has to raise once the ceiling is lifted,” Bear Traps analyst Robbert Van Batenburg tells me. “Yellen in the 2023 debt ceiling crisis drove this checking account down to less than $50 billion, forcing her to raise a whopping $800 billion in the summer of 2023.” To be sure, the dangerous TGA drawdown comes from overspending, but also fr...