When the U.S.Treasury engages in debt financing,

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When the U.S. Treasury engages in debt financing, it sells securities (e.g. Treasury bills, notes, and bonds) to the public to raise money to fund government operations. These securities are considered safe investments because they are backed by the full faith and credit of the U.S. government. The Treasury does not borrow directly from the Federal Reserve, sell federal assets, or increase taxes to finance the debt. Short-term interest rates may be affected indirectly by the Treasury's debt financing if investors decide to shift their investments from other assets (e.g. stocks) to Treasury securities, causing the demand for Treasury securities to increase and driving down short-term rates.

When the U.S.Treasury Engages in Debt Financing