MNI BRIEF: US Treasury Raises Q1 Borrowing Estimate By USD353B

The U.S. Treasury Department on Monday announced it expects to borrow USD932 billion in privately-held net marketable debt in the first quarter, USD353 billion more than previously announced in October, and a total of USD1.21 trillion in the first half of the year.

Treasury is assuming a cash balance of USD500 billion at the end of March. The increase in anticipated first quarter borrowing is due to a lower cash balance and projections showing lower receipts and higher outlays. For the second quarter, Treasury anticipates borrowing USD278 billion, assuming an end-of-June cash balance of USD550 billion. The Treasury's next quarterly refunding will be released at 8:30 a.m. February 1.

The estimates are based upon current law and assume enactment of a debt limit suspension or increase. Treasury officials on a call warned constraints related to the debt limit could mean Treasury’s cash balance may be lower than assumed. If Treasury’s cash balance for the end of either quarter is lower than assumed, and assuming no changes in the forecast of fiscal activity, Treasury would expect that borrowing would be lower, officials said.