The Treasury Department said Monday it expects to borrow $760 billion in the first quarter, which is $55 billion lower than previously estimated. The decline was driven, in part, “higher net fiscal flows” and a higher cash balance. The updated forecast includes an end-of-quarter cash balance of $750 billion.
Looking ahead to the second quarter, Treasury said it expects to borrow $202 billion in net marketable debt with a cash balance of $750 billion. Borrowing needs are less in the April-June quarter because of the April 15 is when individual income tax returns are due.
In the October-December quarter, Treasury borrowed $776 billion and ended with a cash balance of $769 billion. The borrowing level was in line with the department’s prior estimate, although the cash balance was expected to be $750 billion.
Concern about the government’s borrowing needs has eased over the past quarter. The yield on the 10-year Treasury note BX:TMUBMUSD10Y has dropped to 4.095% from 4.93% at the end of October.
Additional financing details related to the Treasury’s quarterly refunding will be released at 8:30 a.m. Eastern on Wednesday.
