U.S. Treasury Lifts Quarterly Borrowing Estimate to $947 Billion

U.S. Treasury Lifts Quarterly Borrowing Estimate to $947 Billion

imageForex7 hours ago (Aug 03, 2020 03:18PM ET)

(C) Reuters. U.S. Treasury Lifts Quarterly Borrowing Estimate to $947 Billion

(Bloomberg) — The U.S. Treasury said it expects to raise $947 billion in debt over the three months through September to fund the massive and continuing spending surge to address the coronavirus crisis.

The figure, released in Washington Monday, is $270 billion higher than the Treasury projected in May, when it expected to borrow $677 billion of net marketable debt in the quarter. Since then, Covid-19 cases have surged to records in many states, disrupting economic reopening moves and forcing Congress to negotiate on another round of fiscal stimulus.

The Treasury said its numbers assume $1 trillion of “additional borrowing need in anticipation of additional legislation being passed.” That’s roughly the amount Republicans have proposed for a new virus-relief bill. But the Democratic-controlled House previously approved a $3.5 trillion package, and the two sides remain at loggerheads.

Republican lawmakers have sharpened their focus on the possible impact on a federal budget deficit that the Congressional Budget Office already sees hitting a record $3.7 trillion in the fiscal year ending Sept. 30.

The new borrowing figure is based on an estimated Treasury cash balance of $800 billion for the end of September, unchanged from the May projection. That figure last week hit an all-time high, exceeding $1.8 trillion — partly a reflection of expected costs in coming months related to forgiving loans to small businesses to help keep them going amid the recession.

The Treasury also said that borrowing surged to an unprecedented $2.753 trillion in April through June, when the Treasury was funding the largest stimulus in modern history.

Read this for more on the money market impact of the Treasury cash balance

For the three months through December, the Treasury anticipates selling $1.216 trillion in net marketable debt, assuming a cash balance of $800 billion at the end of the calendar year.

Monday’s borrowing estimates precede the Treasury’s so-called quarterly refunding announcement on Wednesday, when the department releases plans for the sizes of auctions of longer-term debt, along with any shifts in its issuance strategy. Wall Street widely expects the Treasury to skew more of its record-breaking issuance to the longer end of the Treasury curve.

Read more: Treasury Market Fired Up to Vault Over Biggest Supply Hurdle Yet

(C)2020 Bloomberg L.P.

U.S. Treasury Lifts Quarterly Borrowing Estimate to $947 Billion

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

No Comments

Post A Comment

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!