TREASURIES-January T-bill interest rates turn negative
NEW YORK Dec 27 (Reuters) - Interest rates on U.S. Treasury bills that mature in early January turned negative on Thursday on safe-haven buying in anticipation the United States might face drastic federal spending cuts and a spike in taxes next year.
Earlier, U.S. Senate majority leader Harry Reid hinted a federal budget deal was unlikely before the year-end deadline, raising the prospects of the nation going over the "fiscal cliff" -- a package of automatic tax hikes and spending cuts worth $600 billion set to kick in in early 2013.
The keen purchases of ultra short-dated government debt were also stoked by the world's biggest economy being set to hit its $16.4 trillion borrowing cap on Monday.
The interest rate on T-bills due Jan. 10 was quoted at minus 0.5 basis point, down half a basis point from late on Wednesday, while the bill issue due the following week was quoted at minus 0.25 basis point, down 1.5 basis points, according to Tradeweb.
The rate on T-bills due Jan. 3 turned more negative at minus 1.5 basis points.
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