US Treasury Reduces Quarterly Borrowing Estimate for October-December Period

The U.S. Treasury has revised its federal borrowing estimate for the current quarter downward as it aims to continue replenishing its financial reserves.

The Department has adjusted its net borrowing estimate for the October to December period to $776 billion, a decrease from the $852 billion projected in late July. Prior to this announcement, some analysts anticipated that the Treasury would lower its borrowing forecasts.

Jefferies noted in a report that for the fourth quarter, they expect borrowing projections to be revised to $745 billion from an initial estimate of $850 billion.

For the January to March 2024 quarter, the Treasury plans to borrow $816 billion in privately-held net marketable debt, assuming a cash balance of $750 billion by the end of March.

Market reactions were relatively stable following this news. Additionally, the Treasury is scheduled to release its Quarterly Refunding statement, detailing its plans for issuing debt.

In recent months, the Treasury’s funding strategies have gained significance as some analysts have linked the increase in Treasury supply to the recent rise in yields, reaching multi-month peaks. The U.S. Treasury has increased the issuance of government bonds after utilizing its reserves to support government operations, particularly following the debt ceiling crisis earlier this year.