U.S. Treasury's Record Borrowing Needs This Quarter

Well there's a shocker. The United States Treasury just announced that it will need to borrow $361 billion for the April-June Quarter, higher by $196 billion than announced previously in February, and is miles more than the same period last year when the Treasury had to borrow "only" $13 billion. This is traditionally the cash heavy tax-receipt quarter in which borrowing needs should be the lowest. Not only that, but Treasury will need to borrow $515 for the subsequent, July-September, quarter. Indicatively, the all time high borrowed amount was $569 billion in the October-December period. In the last quarter, the Treasury borrowed $481 billion, and ended the quarter with $269 billion in cash.

During the April – June 2009 quarter, Treasury expects to borrow $361 billion of marketable debt, assuming an end-of-June cash balance of $245 billion, which includes $200 billion for the Supplementary Financing Program (SFP). The borrowing estimate is $196 billion higher than announced in February 2009. The increase in borrowing is primarily related to a continuation of the SFP, and lower receipts and outlays.

During the July – September quarter, Treasury expects to borrow $515 billion of marketable debt, assuming an end-of-September cash balance of $270 billion, which includes $200 billion for the SFP.

During the January – March 2009 quarter, Treasury borrowed $481 billion of marketable debt, finishing at the end of March with a cash balance of $269 billion, of which $200 billion was attributable to the SFP. In February, Treasury estimated $493 billion in marketable borrowing, assuming an end-of-March cash balance of $225 billion. The decrease in borrowing was related to lower receipts offset by lower outlays and adjustments in the cash balance.

The current borrowing limit of $12.1 trillion (increased by Congress in February) will likely need to be reevaluated yet again, as the national debt now stands at $11.1 trillion. Incidentally, there is $100 billion of UST supply in 2, 5 and 7 year notes over the next 3 days.

Comments

[yellowhoard]

Don't panic.

Obama is cutting $100,000,000 from the budget.

2009 Apr 28 09:21 AM

[bricki]

Remember when people were worried that the Treasury was going to stop issuing debt?

How times have changed.

2009 Apr 28 10:17 AM

[PainfullyAware]

I feel like I am locked in the back seat of a car piloted by a drunk and headed for a cliff. No matter the level of passenger complaint, Ignorance Continues.

Frugality Does Not Apply To Government, As So Evidenced By The Plethora Of Metrics.

Well, at least we have a real cool picture of Air Force One flying over the Statue Of Liberty.

Oh, The Insidious Irony.

2009 Apr 28 09:22 PM

[Jasper M]

?!? Do they really believe the tottering Chinese will be able to foot all of this?! Indefinitely??
Maybe the plan is sort of the reverse of the old Reagan-era 'starve the beast" strategy - maybe they intend to make things SO bad, that they hope people will pressure their congresspersons to give the Obama admionsitration carte blanche to fix SS, etc.
Won't work. Depressions are divisive, polarized times. They will blame him (and rightly so).

2009 Apr 29 02:16 AM

[Obi-Wan]

Unsustainable is an understatement......with fiscal irresponsibility like this, who cares about N. Korea or Iran....we'll do ourselves in without them......

2009 Apr 29 08:44 AM

[Allan Frain]

"During the April – June 2009 quarter, Treasury expects to borrow $361 billion of marketable debt, assuming an end-of-June cash balance of $245 billion, which includes $200 billion for the Supplementary Financing Program (SFP)."

Quantitative Easing is a resignation that Treasury Debt--at current interest rates--is NOT marketable.

2009 Apr 29 12:35 PM

[altaman]

Methinks as least the bond market is not totally irrational, compared to the stock market anyway, as the bond bubble appears to be on way way to popping. The Fed has been unable to hold the psychologically important support levels of 3% on the 10 year (key for setting mortgage rates) and long bond holders have been crushed over the last several days. Hey don't worry guys - you can just hold those Obama bonds paper until maturity and get "all" of your inflation-adjusted money back (not that it will be worth jack with interest/inflation rates sure to go double digits within the next 3 years).

2009 Apr 29 03:19 PM

[igggy]

One country comes to mind where the long-term interest rates are around 2% and they can still sell their debt. Yes, it's Japan and I think we are heading there. It will take only a slight drop in the stock market and everyone will head back to treasuries.

2009 Apr 29 07:39 PM

[Hmm?!]

Igggy,

You may be right for a little while longer. Smart money will buy high quality foreign bonds and collect currency premiums over time.

When this eventually hits home with retail investors...........sh** will hit the fan and the bubble will finally explode. The government is already buying its own bonds.

China is by far the biggest treasury holder..........do you see them buying any bonds lately? They are screaming about the dollar! And buying mining companies, copper, gold, loaning to government oil interests.


On Apr 29 07:39 PM igggy wrote:

> One country comes to mind where the long-term interest rates are
> around 2% and they can still sell their debt. Yes, it's Japan and
> I think we are heading there. It will take only a slight drop in
> the stock market and everyone will head back to treasuries.

2009 Apr 30 01:27 AM