U.S. Treasury intends to boost the borrowing amount in fourth quarter

The U.S. Department of the Treasury announced on July 31st, 2017 that it expected to borrow $96 billion in third-quarter - $2 billion less than it previously estimated, but intended to drastically boost the borrowing amount in the final three months of the year.

The U.S. Treasury said in a statement that it expects to issues $96 billion in net marketable debt during the July-September period, assuming an end-of-September cash balance of $60 billion. However, the desired borrowing amount in the fourth quarter radically raised to $501 billion. “That estimate is a massive projected borrowing figure, the likes of which have not been seen since Q4 2008," investment bank Jefferies said in a note to clients.

The Secretary of U.S. Treasury Steven Mnuchin proposed Congress to raise the federal debt limit before lawmakers started their August recess, to avoid higher interest costs to taxpayers and market confusion about a potential default. Republican leaders in Congress have begun having bipartisan canvasses on the matter in the House of Representatives.

During the second quarter, Treasury borrowed $35 billion in net marketable debt and ended the quarter with a cash balance of $181 billion. In April 2017, Treasury estimated net marketable borrowing of $26 billion and assumed an end-of-June cash balance of $200 billion. It affirmed that the increase was driven primarily by lower receipts.
See also: