US Boosts Net Quarterly Borrowing Estimate to $514 Billion

Uncle Sam´s living on borrowed money & borrowed time

US Boosts Net Quarterly Borrowing Estimate to $514 Billion

Alexandra Harris

Mon, April 28, 2025 at 4:14 PM GMT-3 3 min read

(Bloomberg) — The US Treasury ramped up its estimate for federal borrowing for the current quarter to account for a much smaller starting stockpile of cash than it had projected — a consequence of Congress having failed as yet to raise the federal debt limit.

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  The Treasury Department said in a statement Monday that it now estimates $514 billion in net borrowing for April through June, up from the $123 billion it had penciled in back in February. As is its usual practice, the Treasury had assumed in its previous projections that the debt ceiling — which kicked back in at the start of January — would be raised or suspended. But lawmakers are still working on the issue.

While in February the Treasury had assumed an end-of-March cash balance of $850 billion, it actually ended up much smaller, at about $406 billion. Under the debt limit, the government is prevented from issuing net new supply of Treasuries. The department on Monday retained its previous forecast for an $850 billion cash-balance target for the end of June, continuing to assume the debt limit will be sorted.

“Excluding the lower than assumed beginning-of-quarter cash balance, the current quarter borrowing estimate is $53 billion lower than announced in February,” the Treasury said.

Wrightson ICAP senior economist Lou Crandall flagged, before the announcement, that the last quarterly estimates came before the unprecedented announcements of hikes on import duties announced by President Donald Trump. The extra tariff revenue may now also be shaping the Treasury’s cash management, he wrote in a note.

Dealers’ expectations for the new borrowing estimate had varied ahead of Monday’s release, given the uncertainty surrounding the resolution of the debt ceiling. Crandall had expected a ramp up in the borrowing projection if the Treasury maintained the “unrealistic assumption” that the cash balance would rebound to $850 billion by the end of June.

But strategists at JPMorgan Chase & Co. expected the Treasury to announce $255 billion in net marketable borrowing, assuming an end-of-quarter cash balance of $300 billion.

The federal debt cap was reinstated at start of January. Any drawn-out episode in Congress over raising or suspending the limit will force the Treasury to slash bill issuance and spend down its cash buffer.

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