US Treasury announces record borrowing of $2.99 trillion to cover pandemic efforts

Marco Green
May 6, 2020

The U.S. Treasury Department plans to borrow almost $3 trillion between April and June to bankroll the federal response to the coronavirus pandemic.

Treasury projected that it will have to borrow an additional $677 billion in the July-September quarter.

"But this is not the time", he said, "to let that get in the way of us winning this battle". Estimated debt issuance for the full fiscal year is expected to near $4.5 trillion.

The June quarter borrowing goal is six times the previous three-month record of $US530 billion, which took place during the global financial firestorm of 2008's third quarter.

But with the virus spreading rapidly soon after that projection - and tanking the economy along with it - Congress has appropriated almost $3 trillion to help individuals and companies weather the business shutdowns implemented to slow the pace of the pandemic. During the third quarter, Treasury expects to borrow United States dollars 677 billion in privately-held net marketable debt, assuming an end-of-September cash balance of USD 800 billion, the statement said. "But now all things are out the window", said Mike Lorizio, senior fixed income trader at Manulife Investment Management in Boston. The Treasury said Monday it expects to borrow almost $3 trillion in the April-June quarter. During the first quarter, the Treasury borrowed $477 billion in privately-held net marketable debt and ended the quarter with a cash balance of $515 billion, it said. Treasury will work with Tribes to confirm employment numbers and seek additional information regarding higher expenses due to the public health emergency. In February, Treasury said it would announce details of a planned new 20-year bond in May.

Treasury also noted a change in tax revenue, in part because it is offering deferrals. "At this point, Treasury needs to find every available avenue to raise as much cash as efficiently as possible".

"We thank our congressional partners for working hard to convey to the Treasury and Interior secretaries the importance of getting this funding out the door and to tribal nations", said Navajo Nation Speaker Seth Damon.

Other reports by Click Lancashire

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