The U.S. Treasury expects to borrow $776 billion from October through December, $76 billion less than it had projected in July. It announced the new figure on Monday, Reuters reported.
Higher tax receipts explain most of the cut, partly offset by higher spending. A Treasury official said part of the extra revenue comes from income tax payments that California and some other states had put off because of natural disasters. Those payments are now starting to reach the Treasury.
Even at the lower figure, the quarter would set a record. The previous high for October through December was $689 billion, borrowed in 2021 during heavy COVID-19 relief spending.
Markets barely moved. Treasury yields slipped slightly after the announcement, and the benchmark 10-year yield was last at 4.86 percent.
What comes next
For the first quarter of 2024, the Treasury projects borrowing of $816 billion. That would also be a record for the period, though the Treasury noted that borrowing plus cash-balance drawdowns has been higher in some earlier years. It expects a cash balance of $750 billion at the end of both December and March.
The July-September quarter gives a comparison. The Treasury borrowed $1.01 trillion and finished the quarter with a cash balance of $657 billion. That was the largest net debt issuance for any third quarter, though it was still well short of the almost $3 trillion borrowed in the second quarter of 2020, when the government stepped up spending during COVID business closures.
