New York Mellon Bank strategists say that the United States can offset the loss of tariff revenue by increasing the issuance of treasury bills.

Strategists at New York Mellon Bank said that after the U.S. Supreme Court overturned President Trump's tariff policy, the United States may issue more short-term bonds to make up for the loss in tax revenue. John Velis, the bank's Americas macro strategist, estimated that the U.S. would lose about half of the monthly $20 billion tariff revenue. Velis pointed out that the U.S. could rely on treasury bonds to fill this "huge" gap, explaining why the U.S. Treasury market's response has been relatively subdued since the ruling on Friday. Velis wrote in a report released on Tuesday that increasing the issuance of treasury bonds could prevent "significant upward pressure on long-term yields due to deteriorating fiscal conditions." He cited data from New York Mellon Bank, which showed that the demand for treasury bonds exhibits nearly no elastic response to the supply, meaning that increased issuance would be met with "existing demand absorption."