Treasury raises quarterly borrowing estimate to $127 billion

The U.S. government expects to borrow $127 billion in the July-September quarter, an estimate that is $61 billion higher than previously projected in May, the Treasury Department said Monday. The increase in borrowing in the current quarter is due to changes in cash balance assumptions as well as a small increase in financing needs, the department said. The estimate includes an assumption of an end-of-September cash balance of $225 billion. For the October-December quarter, Treasury expects to borrow $270 billion in net marketable debt assuming a cash balance of $275 billion. During the April-June quarter, Treasury issued $57 billion in net marketable debt and ended with a cash balance of $254 billion. Analysts said estimating Treasury's financing needs is more difficult because of uncertainty surrounding the debt ceiling. Congress has until late October to raise the ceiling, according to an estimate last week from Treasury Secretary Jacob Lew. The department has been using extraordinary accounting measures since March to stay below the debt limit. Treasury will announce on Wednesday the sizes and terms of the auction it holds four times a year to finance part of the debt.

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