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Treasury Announces Sharply Reduced Borrowing Estimates

Consistent with reports in the Wall Street Examiner Professional Edition Treasury Updates, the government will borrow less in the first quarter than it had originally forecast, primarily due to a big increase in withholding taxes since mid December. It is also estimating a much lower borrowing rate for the second quarter, meaning that its economic forecast assumes that the increase levels of tax collections will continue through mid year.

Washington, D.C. — The U.S. Department of the Treasury today announced its current estimates of net marketable borrowing for the January – March 2012 and the April – June 2012 quarters:

During the January – March 2012 quarter, Treasury expects to issue $444 billion in net marketable debt, assuming an end-of-March cash balance of $30 billion. This borrowing estimate is $97 billion lower than announced in October 2011. More than half of the decrease is due to relative changes in the opening and end-of-quarter balances; the actual end-of-December balance was $26 billion higher, while the estimated end-of-March balance is $30 billion lower. Higher receipts and lower outlays account for the majority of the remaining decrease.

During the April – June 2012 quarter, Treasury expects to issue $200 billion in net marketable debt, assuming an end-of-June cash balance of $90 billion.

During the October – December 2011 quarter, Treasury issued $310 billion in net marketable debt, and ended the quarter with a cash balance of $86 billion. In October 2011, Treasury estimated $305 billion in net marketable borrowing and assumed an end-of-December cash balance of $60 billion. The higher cash balance was driven primarily by higher-than-projected receipts and lower outlays.

Additional financing details relating to Treasury’s Quarterly Refunding will be released at 9:00 a.m. on Wednesday, February 1, 2012.

Treasury Announces Marketable Borrowing Estimates

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