The borrowing estimate is $353B higher than announced in October 2022
Washington – The U.S. Department of the Treasury announced current estimates of privately-held net marketable borrowing for the Jan.– March 2023 and April – June 2023 quarters.
During the Jan. – March 2023 quarter, Treasury expects to borrow $932B in privately-held net marketable debt, assuming an end-of-March cash balance of $500B. The borrowing estimate is $353B higher than announced in October 2022, primarily due to the lower beginning-of-quarter cash balance ($253B), and projections of lower receipts and higher outlays ($93B).
During the April – June 2023 quarter, Treasury expects to borrow $278B in privately-held net marketable debt, assuming an end-of-June cash balance of $550B.
During the Oct. – Dec. 2022 quarter, Treasury borrowed $373B in privately-held net marketable debt and ended the quarter with a cash balance of $447B. In Oct. 2022, Treasury estimated borrowing of $550 billion and assumed an end-of-Dec. cash balance of $700 billion. The $177 billion difference in privately-held net market borrowing resulted primarily from the lower end-of-quarter cash balance, somewhat offset by lower net fiscal flows.
Privately-held net marketable borrowing excludes rollovers (auction “add-ons”) of Treasury securities held in the Fed Reserve System Open Market Account (SOMA) but includes financing required due to SOMA redemptions. Secondary market purchases of Treasury securities by SOMA do not directly change net privately-held marketable borrowing but, when the securities mature and assuming the Fed Reserve does not redeem any maturing securities, would increase the amount of cash raised for a given privately-held auction size by increasing the SOMA “add-on” amount.
These borrowing estimates are based upon current law.
The end-of-March and end-of-June cash balances assume enactment of a debt limit suspension or increase. Treasury’s cash balance may be lower than assumed depending on several factors, including constraints related to the debt limit. If Treasury’s cash balance for the end of either quarter is lower than assumed, and assuming no changes in the forecast of fiscal activity, Treasury would expect that borrowing would be lower by the corresponding amount(s).
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