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US Treasury Says It Will Borrow $3 Trillion in Q2

The $3 trillion includes $1.37 trillion already borrowed in April. That implies additional borrowing of $1.63 trillion in May and June. May typically has light net new borrowing. May 2019 net borrowing totaled $67 billion.

The $3 trillion estimate is an increase of $3.06 trillion above the Treasury Department’s Q2 estimate that it posted in February.

See Liquidity Trader for ongoing in depth analysis and outlook.

Less Support from the Fed Forces Re-evaluation of Stock Market

I am rescinding the comments I made last week about the long term trend. The Fed’s commitment to maintaining a bullish trend in stocks is now in doubt, and the long term indicators on the market index charts are ambiguous.

The outlook is rife with uncertainty. We don’t know when or if the Fed will re-deploy its tactical carpet bombing of deeply embedded, indigenous bearish forces.

It’s like the Viet Nam war. The Fed has overwhelming firepower, but it may not be committed to using it because of the astronomical long term cost fighting an entrenched enemy. We need to watch to the technical indicators closely to try to determine what each side is doing and will do, and which might have the upper hand.