US Treasury refunding update: $243 billion vs $202 billion prior | Forexlive

Adam Button

Monday, 29/04/2024 | 19:00 GMT-0

29/04/2024 | 19:00 GMT-0

• Initial Treasury estimates for the April-June quarter were $202 billion
• The previous estimate was $202 billion from late January
• Expects to borrow $847 billion in July-Sept quarter, assumes end-Sept cash balance of $850 billion
• In Jan-March quarter borrowed $748 billion, ended with cash balance of $775 billion

There was some talk this could be revised lower because of higher receipts but it's been the exact opposite, with borrowing swelling by $41 billion. This is not good for bonds.

The announcement says:

The borrowing estimate is $41 billion higher than announced in January 2024, largely due to lower cash receipts, partially offset by a higher beginning of quarter cash balance.

The release highlights that the cash balance at the end of Q1 was $25b higher than anticipated. This suggests more spending in Q2, lower revenues or a pull-forward in spending from Q3/4. There could also be effects from FOMC tapering, which isn't factored in but should be announced at Wednesday's Fed meeting.

ZeroHedge highlights that it might not be so bad: