LA Times/Bloomberg — The U.S. Treasury announced on Monday it’s “Marketable Borrowing Estimates,” for July-September 2018 and October-December 2018.
The break down from the linked U.S Treasury announcement:
- During the July – September 2018 quarter, Treasury expects to borrow $329 billion in privately-held net marketable debt, assuming an end-of-September cash balance of $350 billion. The borrowing estimate is $56 billion larger than announced in April 2018. The increase in borrowing is driven by both changes in the cash balance and lower net cash flows.
- During the October – December 2018 quarter, Treasury expects to borrow $440 billion in privately-held net marketable debt, assuming an end-of-December cash balance of $390 billion.
According to the linked LA Times article the second-half borrowing estimate is the highest since $1.1 trillion in July-December 2008, the height of the financial crisis. The article points out that the Treasury is booting sales of bills, notes, and bonds, in order to help finance the “budget gap that’s widening” since President Trump signed the $1.5 trillion in tax cuts and Congress approved a “roughly $300-billion spending increase.”
Secretary of Treasury Steven Mnuchin said Sunday, via The LA Times, “well on the path” for four or five years of sustained annual growth of 3%,” the statement came as officials say a “stronger economy will boost government revenue and help shrink the budget deficit.”
The current budget deficit totaled $607 billion, when compared to last year for the same nine month period it totaled $523 billion from a year earlier. The article also notes that the Congressional Budget Office in June predicts, “total government spending would exceed revenue by $1 trillion in 2020.”
On Wednesday the Treasury department is set to announced it’s “quarterly refunding,” that’s when “the size of the government debt auctions are unveiled,” the quarterly estimates on borrowing precede that announcement.
