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The U.S. Treasury on Monday lowered its estimate of privately held net marketable borrowing for the final quarter of 2026 to $618 billion, saying a larger cash balance at the start of the quarter reduced the amount it expects to raise.
The estimate is $10 billion below the projection issued in August and assumes Treasury will finish December with $850 billion in cash, according to the department’s November 2 borrowing announcement.
The headline reduction does not mean underlying financing needs have eased. Treasury said that, excluding the benefit from its higher-than-assumed opening cash balance, its October-December borrowing estimate is $24 billion higher than it projected in August.
Opening cash offsets higher needs
Treasury entered the quarter with $984 billion in cash, compared with the $950 billion it had previously assumed. That $34 billion difference lowered its expected need to borrow, while lower projected net cash flows partly offset the benefit, the department said.
The department kept its end-of-December cash assumption at $850 billion. The revised borrowing estimate therefore reflects both the larger starting cushion and the updated outlook for money flowing into and out of the government’s accounts.
These are quarterly financing estimates, not a new announcement of the sizes or maturity mix of individual debt auctions. Treasury said it will provide additional details in its quarterly refunding announcement at 8:30 a.m. Eastern time on Wednesday, November 4.
$800 billion projected for early 2027
For January through March 2027, Treasury estimates it will borrow $800 billion in privately held net marketable debt. That projection assumes an end-of-March cash balance of $1 trillion.
The next-quarter estimate is conditional on that cash target. It should not be read as an announced auction schedule or a measure of the federal deficit on its own: the release concerns Treasury’s financing requirements and cash balances.
Prior-quarter borrowing reached $742 billion
Treasury also reported that it borrowed $742 billion in privately held net marketable debt during July through September and finished the quarter with $984 billion in cash. Its August projection had called for $739 billion in borrowing and a $950 billion closing cash balance.
Excluding the higher-than-assumed closing cash balance, Treasury said actual borrowing for that quarter was $30 billion below the August estimate. The figures show why cash assumptions matter when comparing successive borrowing projections.
The department’s definition excludes rollovers of securities held in the Federal Reserve’s System Open Market Account, while including financing needed for redemptions from that portfolio. Monday’s release sets out the aggregate borrowing outlook; Wednesday’s refunding announcement is the next scheduled step for further financing details.
JBizNews Desk | Washington
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