MNI POLICY: US Plans to Borrow $947 Billion in Q3

The U.S. Treasury expects to borrow USD947 billion during the third quarter of 2020, reflecting relief payouts and lower tax revenue amid the Covid-19 pandemic.

The third quarter borrowing estimate was up USD270 billion compared to May's USD677 billion.

The department also said it expects to issue USD1.216 trillion in net marketable debt in the fourth quarter. The estimates assume cash balances of USD800 billion at the end of September and June.

Treasury said the estimates assume USD1 trillion of additional borrowing need due to legislation likely to be passed in Congress in response to the Covid-19 outbreak.

During the second quarter of 2020, Treasury borrowed USD2.753 trillion in privately-held net marketable debt and ended the quarter with a cash balance of USD1.722 trillion.

In May 2020, Treasury estimated privately-held net marketable borrowing of USD2.999 trillion and assumed an end-of-June cash balance of USD800 billion.

The Treasury said Monday that a USD246 billion decrease in borrowing compared to May estimates resulted primarily from lower-than-projected expenditures and higher receipts largely offset by the increase in the cash balance.

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