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MNI POLICY: U.S. Cuts Q4 Borrowing Plans in Half to USD617B

(MNI) WASHINGTON
WASHINGTON (MNI)

The U.S. Treasury on Monday said it plans to borrow USD617 billion in the fourth quarter, half what officials predicted in August because the absence of a second fiscal package left the government with more cash on hand.

The borrowing estimate in Q4 is USD599 billion lower than expected in August 2020, and assumes a cash balance of USD800 billion at the end of December.

During the first quarter of 2021, Treasury expects to borrow USD1.127 trillion in privately-held net marketable debt, assuming an end-of-March cash balance of USD800billion.

Treasury borrowed USD454 billion in privately-held net marketable debt in the third quarter, and ended up with a bloated cash balance of USD1.782 trillion.

The decline in the cash balance in the fourth quarter "will depend on several factors that are highly uncertain, which would include the pace of outflows under current law, the potential for additional legislation," a senior Treasury official told reporters on condition of anonymity.

"We have taken the precautionary step of building up the cash balances to ensure that we have sufficient funds to cover those uncertainties," the senior Treasury official said.

The U.S. debt limit was suspended in 2019 until July 2021, after which the Treasury has been asked by Congress to reduce the cash balance to USD133 billion, and could to further uncertainty in 2021.

Additional details of Treasury's quarterly refunding will be announced at 8:30 a.m. EST on Wednesday.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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