US Treasury cash reserves face uncertainty, strategists at Bank of America and other institutions said: may affect the bond market

A leadership change at the US Treasury could change the department's approach to cash held at the Federal Reserve, with strategists warning that the move could affect the US bond market. Bank of America and Wrightson ICAP LLC, among others, said the Treasury could reduce the amount of money it holds in Fed accounts as the cash balance - the cushion that ensures the US can pay its bills - shrinks. That would allow the government to issue fewer short-term bonds and, in turn, potentially save taxpayers money, in a context where the debt ceiling has been restored and cash balances are shrinking.