Up $8B from the October estimate
The US treasury department said that the borrowing needs will be higher than expected as a result of the widening budget deficit.
The treasury expects to issue $365 billion of net marketable debt from January to March. That is up about 8 billion from the estimate in October.
The treasury estimates that the end of March cash balance will be $320 billion. That is unchanged from the October estimate.
In it's estimate for the April to June period, they estimate borrowing of $83 billion which is 11 $11 more than the same period last year.
In the quarter just ended the treasury issued $426 billion in net marketable debt which was in line with estimates. The cash balance was $402 billion at the end of December.
The$1.5 trillion and tax cuts and the $300 billion spending increase is responsible for increased borrowing. Also contributing is the aging population is boosting federal programs like Medicare.
The Congressional Budget Office earlier today said that the deficit for the current fiscal year is expected to rise to 897 thing dollars from $779 billion last year. They estimate a deficit of 1 trillion in fiscal 2022. There has been a 1 trillion deficit back in 2009 and 2012 when the Obama administration's family out the financial markets and stimulating as result of the recession.
Higher borrowing needs is thought to increase interest rates all things being equal. However, the US still enjoys decent demand for its debt. Today the US treasury auctioned $81 billion of 2 and 5 year notes.
