The U.S. Treasury's cash reserves are facing uncertainty, and strategists from Bank of America and other institutions say it may affect the bond market

A change in the Treasury’s leadership could change the department’s approach to cash parked at the Federal Reserve, a move strategists warn could reverberate in the U.S. bond market. As cash balances — the cushion that ensures the U.S. can pay its bills — dwindle, the Treasury is likely to park less money in its accounts at the Fed, according to firms including Bank of America Corp. and Wrightson ICAP LLC. That would allow the government to issue fewer short-term bonds, potentially saving taxpayers money, now that the debt ceiling has been restored and cash balances are shrinking.