Borrowing to be stable in Q4
By Christopher S. Rugaber |
November 4, 2010, Thursday
|
Print Edition
Print Edition
The United States Treasury Department yesterday said it will keep its borrowing steady over the next quarter due to uncertainty over the future of the economy and tax policy.
The department had been scaling back its borrowing as tax receipts have risen and projected budget deficits declined.
Treasury officials said they may reduce borrowing again in 2011 but will keep borrowing level in the fourth quarter.
The deficit reached US$1.3 trillion in 2010, down from a record-setting US$1.42 trillion in budget year 2009.
The department said earlier this week that it will borrow US$362 billion in the current quarter. That's down from an estimate of US$380 billion in August.
The Treasury's decision to maintain the size of its debt auctions is unrelated to the Federal Reserve's potential decision to purchase Treasury securities in an effort to lower long-term interest rates, a Treasury official said. The Fed hopes that lowering those rates will spur more borrowing and spending.
Treasury also said it will offer more inflation-indexed securities, known as TIPS, to meet demand.
Treasury plans to hold a TIPS auction every month and will also hold extra auctions of five-year and 30-year TIPS.
The department also said it will auction US$72 billion in long-term debt next week.
The department had been scaling back its borrowing as tax receipts have risen and projected budget deficits declined.
Treasury officials said they may reduce borrowing again in 2011 but will keep borrowing level in the fourth quarter.
The deficit reached US$1.3 trillion in 2010, down from a record-setting US$1.42 trillion in budget year 2009.
The department said earlier this week that it will borrow US$362 billion in the current quarter. That's down from an estimate of US$380 billion in August.
The Treasury's decision to maintain the size of its debt auctions is unrelated to the Federal Reserve's potential decision to purchase Treasury securities in an effort to lower long-term interest rates, a Treasury official said. The Fed hopes that lowering those rates will spur more borrowing and spending.
Treasury also said it will offer more inflation-indexed securities, known as TIPS, to meet demand.
Treasury plans to hold a TIPS auction every month and will also hold extra auctions of five-year and 30-year TIPS.
The department also said it will auction US$72 billion in long-term debt next week.
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