The U.S. Treasury on Thursday postponed the 2-year note auction scheduled for Tuesday due to debt-ceiling constraints.
It said it also may have to postpone the Nov. 2 auction of 2-year notes. Two other auctions scheduled for next week will continue as scheduled.
"The current debt limit impasse is also now adversely affecting the operation of government financing, increasing federal government borrowing costs, reducing the Treasury bill supply, and increasing the operational risk associated with holding a lower cash balance," the department said.
The Treasury has a limited borrowing authority available and said that "cash and nonmarketable debt forecasts are extremely volatile." In mid-October, Treasury Secretary Lew told Congress the department estimates it may have less than $30 billion by early November to meet all of the nation's commitments.
"Treasury believes that postponing the auction for the 2-year note poses less risk for market functioning than postponing the 5-year or 7-year note offering. Once the debt limit impasse is resolved, Treasury will announce a rescheduling of the 2-year note auction."
Earlier this week, Lew told CNBC that he fears waiting until the last minute to raise the nation's borrowing authority could result in an accident "that would be terrible."