Treasury cuts Q3 borrowing estimate as slower pace of QT boosts cash balance

Investing.comJul 30, 2024 12:48 AM

Investing.com -- The U.S. Treasury on Monday cut its estimate for federal borrowing for the third quarter amid a higher-than-expected cash balance.

The Treasury Department lowered its net borrowing estimate for the July through September quarter to $740 billion, down from the $847 billion amount it had forecast in late April, driven by higher cash balance.

The higher cash balance was driven by a slower pace of bond selling, or quantitative tightening that was announced in June, reducing the Treasury's financing needs by $35B a month.

Ahead of the announcement, Jefferies had expected "a modest downward revision to Q3 borrowing to a total of $750B."

For the October to December quarter, Treasury expects to borrow $565 billion in privately-held net marketable debt, assuming an end-of-December cash balance of $700 billion.

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