Donald Trump · U.S. Treasury · Supreme Court · Fortune Technology
The federal government must issue more debt than it expected as cash flow weakens, and ‘the bond market is shouting’
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The Treasury Department announced this week that it expects to borrow more than anticipated in the current quarter as incoming cash flow has been weaker than initially projected.
Key facts
- The $189 billion now estimated for the April-June quarter is $79 billion more than what Treasury saw in February
- The first is the enormous supply of bonds being issued as annual budget deficits run at roughly $2 trillion per year with interest costs alone at $1 trillion
- In a recent blog post titled “The bond market is shouting,” he pointed out that the Federal Reserve has cut the benchmark rate by 175 basis points since mid-2024, but the 10-year Treasury yield
- In addition, the Supreme Court struck down President Donald Trump’s global tariffs earlier this year, and importers have started getting refunds
Summary
The $189 billion now estimated for the April-June quarter is $79 billion more than what Treasury saw in February. With tax-filing deadlines coming in April, the spring quarter typically requires less borrowing than other times of the year. But this filing season, Americans benefited from new tax breaks enacted in last year’s One Big Beautiful Bill Act. For Mark Malek, chief investment officer at Siebert Financial, the borrowing update is the latest example of the immense supply of fresh debt that the Treasury Department is issuing.