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