U.s. Treasury | featured news

The U.S. Treasury Department will begin taking steps this week to delay hitting the government's $16.4 trillion borrowing limit. The government is facing a crunch on the debt ceiling because the issue has become ensnarled in talks to avoid some $600 billion in tax hikes and spending cuts due to begin in early January. Failing to raise the debt ceiling could cause the government to default on its debt.

The U.S. government's short stint in the auto business is coming to an end. The Treasury Department said Wednesday that it will sell its remaining stake in General Motors by early 2014, writing the final chapter of a $50 billion bailout that saved the auto giant but stoked a heated national debate about the government's role in private industry.

The offerings include $35 billion in two-year notes and $29 billion in seven-year securities.

The U.S. Treasury said on Wednesday it had frozen the assets of three Pakistani-based individuals suspected of backing the Taliban and other militant organizations in Pakistan and Afghanistan, including one man linked to a failed attack in New York.

The U.S. Treasury further reduced its stake in American International Group and said on Tuesday that the United States would now profit $15.1 billion from bailing out the insurer.

The Treasury said on Friday it is changing the way Fannie Mae and Freddie Mac will repay taxpayers in a move the Obama administration said would accelerate the winding down of the government-owned mortgage financiers.

Fannie Mae and Freddie Mac, the two mortgage-finance giants, this week reported some of their best quarterly results since the real estate collapse. On Wednesday, Fannie Mae posted second-quarter net income of $5.1 billion. That is up from $2.7 billion in the first quarter of this year and an improvement from a net loss of $2.9 billion in the second quarter of last year. Fannie requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers.

The U.S. Treasury Department launched its fourth sale of shares in American International Group, with the insurer committing to repurchase two-thirds of the $4.5 billion in shares being offered to the public.

China remained the largest foreign holder of U.S. Treasurys in April, marginally increasing its net portfolio. Japan reduced its net holdings for the second month in a row. Overall, foreigners were net buyers of long-term U.S. financial assets in April, according to the monthly Treasury International Capital report, known as TIC.

The Troubled Asset Relief Program calmed markets and underpinned the US economy during the financial crisis. But despite the US Treasury saying last week that Tarp would make a profit, the latest report suggests otherwise. The report said it was a "misconception that Tarp will make a profit".