Treasury Auction: Treasury announces Q3 and Q4 financing needs
Treasury Auction: Treasury announces Q3 and Q4 financing needs this afternoon ahead of Wednesday's August refunding announcement. Uncertainty over the debt limit could make some problems for the debt managers. Back in May the Treasury planned to borrow $98 B in net marketable debt this quarter, assuming a $200 B June cash balance, though the latter actually totaled $181.1 B. While that cash shortfall should have left Treasury officials with the need to boost their borrowing forecast, they may be constrained by the impending debt limit. On Saturday Treasury Secretary Mnuchin sent a letter to the House stating the Congress needs to pass the ceiling by September 29. Meanwhile, the mid- to late-October bills continue to underperform due to debt limit worries. As for Wednesday's refunding announcement, analysts do not look for any changes in the financing schedule and forecast an unchanged $62 B amount for the 3-pronged offering to include $24 B in 3-year notes, $23 B in 10s, and $15 B in bonds. Analysts do not expect the Treasury to hint at new maturities planned for the future, such as a 50-year.