MNI POLICY: US Plans To Borrow Record $2.99 Trillion In Q2

By Evan Ryser

     WASHINGTON (MNI) - The U.S. Treasury expects to borrow a record USD2.99

trillion during the second quarter of 2020, reflecting relief payouts and lower

tax revenue amid the Covid-19 pandemic.

     The department assumes an end-of-June cash balance of USD800 billion, and

also said it expects to issue USD3.7 trillion in net marketable debt in the

second half of the fiscal year, bringing total estimated debt issuance to nearly

USD4.5 trillion in fiscal 2020. 

     In 2019 Treasury borrowed USD1.28 trillion, and in the first quarter of

2020 borrowed USD477 billion in privately-held net marketable debt. The

department a few months ago projected a small debt paydown this quarter. 

     The surge in borrowing is "primarily driven by the impact of the COVID-19

outbreak, including expenditures from new legislation to assist individuals and

businesses, changes to tax receipts including the deferral of individual and

business taxes from April-June until July and an increase in the assumed

end-of-June treasury cash balance," Treasury said in a statement on Monday.

     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; email: evan.ryser@marketnews.com

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