Category: general

The post U. S. Treasury cuts Q4 borrowing estimate to $569B appeared com. The Federal borrowing estimate for the U. S. Treasury Department for the final three months of the year was reduced to $569 billion, thanks to a stronger cash position and improved revenue collection. The three months, which ended on Wednesday, saw $21 billion in short-term borrowing, down from the $590 billion forecast issued in July, indicating a decrease in short-term borrowing. Officials attribute most of the changes to more cash than expected at the beginning of the quarter. The data available suggests that in early October, the Treasury had approximately $891 in cash, which was above the $850 in summer gross cash. Using a substantial portion of the trove allowed the department to slow its rate of wealth increase for spending and debt repayment while still meeting all obligations. Treasury leverages a strong cash buffer The Treasury’s cut results from careful cash management, given there were months of heavy issuance to rebuild reserves following the suspension of the debt ceiling at the start of the calendar year. In previous quarters, the Treasury had increased sales of short-term bills to replenish its coffers. But strong tax inflows and cautious outlays have left it with a much larger cushion than expected. According to analysts, this could ease some of the tension in the bond markets, which have been pressured by the rapid pace of supply and an increase in longer-term interest rates. A borrowing reduction was a strong move to get the Treasury stabilizer working again, according to analysts quoted by the Financial Times. In addition, reductions in the borrowing requirement may help steady Treasury yields, making it easier for investors to anticipate interest rate hikes by the Federal Reserve. Nonetheless, economists claim that the reduction is not an indication of general fiscal moderation. Spending at the federal level remains unchanged, and borrowing.