National debt is poised to reach $36 trillion soon.
The federal government plans to borrow $1.369 trillion over the next six months, the U.S. Department of Treasury announced on Oct. 28.
According to the latest Marketable Borrowing Estimates, the Treasury expects to borrow $546 billion from October to December. This is $19 billion lower than the department’s July announcement, “largely due to a higher beginning-of-quarter cash balance partially offset by lower net cash flows.”
Washington borrowed $762 billion from July to September, which was $22 billion more than projected.
In the January to March quarter, the Treasury then plans to borrow $823 billion, assuming an end-of-March cash balance of $850 billion. This three-month period potentially coincides with another round of debt-ceiling negotiations and expectations that Congress will raise or re-suspend the debt limit.
If the forecasts are accurate, the first-quarter 2025 borrowing would represent the largest nominal amount for this period.
The government’s latest projections were released ahead of its quarterly refunding announcement on Oct. 30, in which the Treasury Department will outline its plans for long-term debt issuance.
In recent years, the U.S. government has issued trillions in short-term debt securities—bonds that mature in terms ranging from 30 days to one year—to manage higher interest payments and growing budget deficits.
The federal shortfall was $1.83 trillion for fiscal year 2024—the third-highest on record.
While Treasury Secretary Janet Yellen has told lawmakers that she is not timing the financial markets, Sen. Bill Hagerty (R-Tenn.) suggested this past spring that the current administration was waiting for the Federal Reserve to start cutting interest rates.
Private-sector estimates suggest that Treasury bills will represent 40 percent of net Treasury issuance.
Lackluster domestic demand has recently challenged the Treasury as foreign investors have dominated auctions.
The Treasury auction of $70 billion in five-year notes resulted in a higher-than-expected yield of 4.138 percent, caused by sluggish investor demand. Nearly 77 percent of the supply was purchased by international investors.
Last year, the Treasury Borrowing Advisory Committee concluded that issuing short-term bonds can be cheaper for the government than selling off medium- and long-term debt securities.
By Andrew Moran
