US Treasury refunding update: $243 billion vs $202 billion prior
Initial Treasury estimates for the April-June quarter were $202 billionThe previous estimate was $202 billion from late JanuaryExpects to borrow $847 billion in July-Sept quarter, assumes end-Sept cash balance of $850 billionIn Jan-March quarter borrowed $748 billion, ended with cash balance of $775 billionThere was some talk this could be revised lower because of higher receipts but it's been the exact opposite, with borrowing swelling by $41 billion. This is not good for bonds. The announcement says:The borrowing estimate is $41 billion higher than announced in January 2024, largely due to lower cash receipts, partially offset by a higher beginning of quarter cash balance.The release highlights that the cash balance at the end of Q1 was $25b higher than anticipated. This suggests more spending in Q2, lower revenues or a pull-forward in spending from Q3/4. There could also be effects from FOMC tapering, which isn't factored in but should be announced at Wednesday's Fed meeting.ZeroHedge highlights that it might not be so bad: This article was written by Adam Button at www.forexlive.com.
- Initial Treasury estimates for the April-June quarter were $202 billion
- The previous estimate was $202 billion from late January
- Expects to borrow $847 billion in July-Sept quarter, assumes end-Sept cash balance of $850 billion
- In Jan-March quarter borrowed $748 billion, ended with cash balance of $775 billion
There was some talk this could be revised lower because of higher receipts but it's been the exact opposite, with borrowing swelling by $41 billion. This is not good for bonds.
The announcement says:
The borrowing estimate is $41 billion higher than announced in January 2024, largely due to lower cash receipts, partially offset by a higher beginning of quarter cash balance.
The release highlights that the cash balance at the end of Q1 was $25b higher than anticipated. This suggests more spending in Q2, lower revenues or a pull-forward in spending from Q3/4. There could also be effects from FOMC tapering, which isn't factored in but should be announced at Wednesday's Fed meeting.
ZeroHedge highlights that it might not be so bad: This article was written by Adam Button at www.forexlive.com.
