Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
The US Treasury has reduced its borrowing estimate for the current quarter and projects a smaller cash buffer by year-end, setting the stage for a potential new debt limit confrontation.
The Treasury now estimates $740 billion in net borrowing for July through September, down from the $847 billion forecasted in April. The expected cash balance for the end of September remains at $850 billion.
The Treasury also forecasts a year-end cash balance of $700 billion, which will decrease after the debt ceiling reactivates at the start of next year unless Congress takes action.
The reduction in borrowing needs is partly due to the Federal Reserve's decision to slow the runoff of its Treasury holdings, reducing the necessity for public debt sales. The Treasury started this quarter with more cash than anticipated.
The Treasury's cash balance at the end of June was about $778 billion, above the targeted $750 billion. As of last Thursday, it stood at about $768 billion.
Analysts like Zachary Griffiths from CreditSights note that the year-end cash balance indicates a moderate decline relative to the elevated third-quarter levels. The Treasury aims to hold about five days of cash flows as a buffer, aligning with its policies under the Fiscal Responsibility Act of 2023.
For the October-December period, the Treasury expects to borrow a net $565 billion. The quarterly refunding announcement on Wednesday will reveal plans for long-term debt issuance, with expectations of steady sales for the second consecutive quarter.
Key Takeaways:
- US Treasury cuts borrowing estimate for Q3 to $740 billion from $847 billion.
- Year-end cash balance projected at $700 billion, indicating a potential debt limit issue.
- Reduction in borrowing needs due to Federal Reserve's slowed runoff of Treasury holdings.
- Cash balance at the end of June was $778 billion, higher than targeted $750 billion.
- For Q4, Treasury expects to borrow $565 billion.
- Quarterly refunding announcement on Wednesday to outline long-term debt issuance plans.
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