Treasury cuts its first-quarter borrowing estimate.

The US Treasury has significantly reduced its quarterly borrowing estimate for the current quarter. Less borrowing is needed due to increased net fiscal flows and a higher cash balance. The new estimate sets the federal borrowing amount for the first quarter at $760 billion, removed $55 billion from the previous predicted cost of $816 billion. This supply and demand trend in the government has a significant impact on the financial market. The surprising revision sparked a rally in bonds and stocks, causing bond yields to drop by about 7 basis points. Assuming $750 billion cash balance is intended at the end of the current March, the estimation for Treasury's cash balance observe a decrease of $19 billion compared to the previous estimates.

January 29, 2024
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