Key insights
- The US Treasury plans to borrow $189B in Q2, significantly higher than previous estimates due to lower net cash flows. They also project borrowing $671B in Q3. This increased borrowing could put upward pressure on interest rates and potentially negatively impact equity valuations.
NEW YORK, May 4 (Reuters) - The U.S. Treasury said on Monday it expects to borrow $189 billion in the second quarter, $79 billion higher than the February estimate primarily due to lower than projected net cash flows that were partially offset by higher than expected cash balance at the beginning of the quarter.
The second-quarter financing estimate assumes a cash balance of $900 billion at the end of June, the Treasury said in a statement.
The Treasury also said it expects to borrow $671 billion in the third quarter, as it forecasts a cash balance of $950 billion at the end of September.