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WASHINGTON – The U.S. Treasury Department today announced its current estimates of net tradable borrowing held by the private sector.[1] For the quarters July-September 2024 and October-December 2024.
- During the third quarter (July-September 2024), the Treasury expects to borrow $740 billion of net tradable debt held by the private sector, assuming a cash balance of $850 billion at the end of September.[2] Borrowing is estimated to be about $106 billion lower than reported in April 2024, largely due to lower Federal Reserve System Open Market Account (SOMA) redemptions and higher cash balances at the start of the quarter.[3]
- During the October-December 2024 quarter, the Treasury expects to borrow $565 billion of net tradable debt held by the private sector, assuming a cash balance of $700 billion at the end of December.[4]
During the fourth quarter (April-June 2024), the Treasury borrowed $234 billion of net privately held tradable debt and ended the quarter with a cash balance of $778 billion. In April 2024, the Treasury estimated borrowing at $243 billion and assumed a cash balance at the end of June of $750 billion. Net privately held tradable borrowing was $9 billion lower largely because higher net cash flows and lower SOMA redemptions were partially offset by a $28 billion higher cash balance at the end of the quarter.
Additional funding details regarding the quarterly Treasury payment will be released at 8:30 a.m. on Wednesday, July 31, 2024.
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[1] Privately held net tradable borrowing does not include repurchases (auction additions) of government securities held in SOMA but does include financing required by SOMA redemptions. Secondary market purchases of government securities by SOMA do not directly change privately held net tradable borrowing but, all else being equal, when the securities mature and assuming that the Fed does not redeem any maturing securities, they would increase the amount of cash raised for a given privately held auction volume by increasing the amount of “addition” to SOMA. In addition, repurchases are not expected to significantly affect privately held net tradable borrowing as new issues replace the securities being repurchased.
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[3] On May 1, 2024, the Federal Open Market Committee announced that, effective June 1, it would reduce the cap on Treasury securities redemptions from the SOMA portfolio from $60 billion per month to $25 billion per month.
[4] The Treasury’s assumed cash balance at the end of December of $700 billion is also its assumed cash balance when the debt ceiling suspension expires on January 1, 2025. This assumption is based on cash flows projected under Treasury’s cash management policies and is consistent with its authorities and obligations, including those under the Fiscal Responsibility Act of 2023. The actual cash balance at January 1, 2025, could differ from this assumption based on changes in cash flows toward the end of 2024.
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