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The U.S. Treasury Department said it plans to borrow more this quarter than previously estimated, as tax cuts and spending hikes inflate the nation’s budget deficit. The new projections put total net borrowing at $769 billion for the second half of 2018 and $1.33 trillion for the whole year.

The department expects to issue $329 billion in net marketable debt from July through September, the fourth-largest total for that quarter on record and higher than the $273 billion estimated in April, according to a statement released Monday in Washington. The Treasury sees an end-of-September cash balance of $350 billion, matching its previous estimate.

From October through December, the Treasury predicted issuance of $440 billion in net marketable debt, with a $390 billion cash balance at the end of the period.

The yield on U.S. 10-year rates edged higher to almost 2.98 percent following the release of the borrowing outlook, but remained within its daily trading range. The two-year rate was steady around 2.67 percent, close to its low for the day.

The Treasury is boosting sales of bills, notes and bonds to help finance a budget gap that’s widening after President Donald Trump signed $1.5 trillion in tax cuts late last year and the Republican-controlled Congress approved a roughly $300 billion spending increase.

The deficit totaled $607 billion through the first nine months of the fiscal year that ends Sept. 30, compared with $523 billion from the same period a year earlier. The Congressional Budget Office in late June predicted total government spending would exceed revenue by $1 trillion in 2020.

From April through June, the Treasury said it issued $72 billion in net marketable debt, compared with its earlier prediction of $75 billion in borrowing. The cash balance was $333 billion at the end of June.

The quarterly borrowing estimates released Monday precede the department’s quarterly refunding announcement on Aug. 1, when the sizes of government debt auctions are announced.

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