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The US Treasury market is one of the largest and most liquid in the world, where investors from ordinary Americans to the governments of China and Japan go to buy the debt of the federal government.

Lately, it has also been one of the most volatile as the Federal Reserve raised interest rates to their highest levels since disco ruled the radio dial. Yields between various maturities, or the amounts that government bonds pay out over time, are inverted – meaning investors are being paid less to own a 10-year bond than they are a six-month bill. That’s often a sign of an impending recession, as the economy is perceived to be more perilous in the short term than further out on the horizon.

But there’s something else rattling the Treasury market: fear about what Washington may do to ensure the government continues to pay its debt.

The federal government technically reached the statutory limit of its borrowing power back in January, the $31.4 trillion debt ceiling beyond which it cannot raise more money to pay its existing bills. However, the Treasury Department is using “extraordinary measures” to keep things going, curtailing some payments into government retirement plans and other moves that have bought some time.

How much time? That is a matter of some debate, but there is a general agreement that the “x” date when these measures will not be enough is going to fall somewhere between June and September. Exactly when it is hard to pin down as it depends on how much money is coming into the government through taxes and other sources of revenue. At best, the dates are based on projections that may or may not prove to be accurate.

To debt holders, that can be unnerving. If the government does default, something has never been done, or even if payments are delayed or prioritized (meaning some people get paid and others don’t, or not as quickly) it could leave bondholders in the lurch. Or credit-rating agencies could downgrade the US government’s creditworthiness, making it more expensive to borrow in the future.

“We lifted the debt limit. We’ve sent it to the Senate. We’ve done our job,” McCarthy said after passage.

Now the fun begins. The Senate considered the bill a non-starter and the White House issued a statement saying, “President Biden will never force middle class and working families to bear the burden of tax cuts for the wealthiest, as this bill does. The President has made clear this bill has no chance of becoming law.”

Some sense of how the bond market is viewing things can be seen in the performance of the one-month Treasury bill, a short-term instrument that is widely used to park cash that may be needed for investment or for redemptions from money-market funds and other short-term accounts.

At the end of March, the one-month was yielding 4.704% but as of Thursday, that had fallen to 3.795%. The three-month Treasury, by contrast,