U.S. Treasury blasts records with $3 trillion borrowing need this quarter

WASHINGTON (Reuters) - The U.S. Treasury Department on Monday said it plans to borrow nearly $3 trillion in the second quarter of 2020 - more than five times larger than the previous record - as the federal government spends at a frantic pace to mitigate the impact of the coronavirus on the U.S. economy

In a statement, Treasury said it would borrow $2.999 trillion during the April-June quarter - higher also than the previous record borrowing for a full fiscal year of $1.8 trillion in 2009.

“It is larger than what we would typically do in a year,” a senior Treasury official said. The Treasury’s net borrowing last fiscal year, by contrast, was $1.28 trillion.

Monday’s estimate is $3.055 trillion more than the original target for the quarter issued in early February, when it was still unclear whether the coronavirus would spread widely in the United States. At that time, it appeared as though the federal government would pay down $56 billion of debt in the current quarter, leading Treasury to forecast a negative estimate for new net marketable debt in the period.

But with the virus spreading rapidly soon after that projection - and tanking the economy along with it - Congress has appropriated nearly $3 trillion to help individuals and companies weather the business shutdowns implemented to slow the pace of the pandemic.

The new borrowing target is more than five times larger than the previous single-quarter record set back in the second half of 2008 to combat the financial crisis.

“Even before the pandemic there was going to be some increased funding needs going forward. But now all things are out the window,” said Mike Lorizio, senior fixed income trader at Manulife Investment Management in Boston.

Monday’s estimate assumes a cash balance of $800 billion at the end of June.

Treasury said it expects to borrow $677 billion during the July-September quarter, assuming an end-September cash balance of $800 billion.

It borrowed $477 billion through credit markets in the January-March quarter, ending the period with $515 billion in cash.

Additional details of Treasury’s quarterly refunding will be announced at 08:30 a.m (1230 GMT) on Wednesday. In February, Treasury said it would announce details of a planned new 20-year bond in May.

“Current financing needs also make it such that Treasury does not need to make any offsetting cuts to 10- or 30-year offerings to ‘make room’ for the new 20-year bond,” a report from Jefferies said. “At this point, Treasury needs to find every available avenue to raise as much cash as efficiently as possible.”

Asked if there was capacity in the market to absorb such a huge volume of debt in just three months, a senior Treasury official said: “We do believe that it’s out there.”

Reporting by Dan Burns; Additional reporting by Karen Pierog in Chicago and Ross Kerber in Boston; Editing by Andrea Ricci

 

Panorama Hispano is the regional news and information newspaper for Hispanic and other diverse communities.

US Hispanics are now the largest ethnic minority in the United States numbering 54.2 million as of July 2014. Serving: Buffalo, Rochester, Fredonia, Niagara Falls, NY and Erie, PA. Outside our Market area: Visit our affiliate at: http://www.impremedia.com/

Contact us: Contact@PanoramaHispanoNews.com

Featured News

Jun 16, 2021
Rita Moreno encuentra su autoestima y no se da por vencida

NUEVA YORK (AP) — En el documental “Rita Moreno: Just a Girl Who Decided to Go for It”, el productor Norman Lear dice: “No puedo pensar en nadie que haya conocido en el negocio (del espectáculo) que haya vivido el sueño americano como Rita Moreno”. No está equivocado. Moreno emigró con su madre de Puerto […]

Read More
Jun 16, 2021
50% de cosméticos en EEUU tienen sustancias tóxicas

WASHINGTON (AP) — Más de la mitad de los cosméticos vendidos en Estados Unidos y Canadá están repletos de un compuesto industrial tóxico asociado con graves problemas de salud, incluidos cáncer y bajo peso al nacer, según un nuevo estudio. Investigadores de la Universidad de Notre Dame realizaron pruebas en más de 230 cosméticos de […]

Read More
Jun 16, 2021
Instalan paneles solares en Estación Espacial Internacional

CABO CAÑAVERAL (AP) — Dos astronautas salieron el miércoles a una caminata espacial para instalar poderosos paneles solares en la Estación Internacional a fin de satisfacer las crecientes necesidades de electricidad de los próximos visitantes. Es la primera de una serie de caminatas para equipar el envejecido laboratorio espacial con paneles solares más pequeños, pero […]

Read More

popular categories

Copyright © 2021 Panorama Hispano News. All Rights Reserved.
crossmenuchevron-downmenu-circlecross-circle
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram