MNI BRIEF: US Boosts Q2 Borrowing Estimate To $514B, Q3 $554B

The U.S. Treasury on Monday increased its estimate for federal borrowing for the current quarter by USD391 billion to USD514 billion, while reiterating its previous assumption for cash balance at the end of June, assuming that Congress eventually raises or suspends the debt limit.

The Treasury Department said in a statement Monday that it now estimates USD514 billion in net borrowing for April though June, up significantly from the USD123 billion it had penciled in back in February and above market expectations. The increase was mainly a result of having less cash than expected at the start of the quarter due to debt ceiling constraints, a senior Treasury official said. The department aims to keep a one-week cash buffer on hand, which it failed to do at the end of the first quarter, and it is assuming an end-of-June and end-of-September cash balance of USD850 billion. 

From July to September, the U.S. expects to borrow USD554 billion. During the January to March quarter, Treasury borrowed USD369 billion and ended the quarter with a cash balance of USD406 billion. Treasury's cash forecast takes into account all projections of the government's cash flow, including estimates of what any changes in tariffs would be, a senior Treasury official said.