Privately held net marketable borrowing for Q4-2024 was revised down by USD19bn to USD546bn, largely due to a higher beginning-of-quarter cash balance partially offset by lower net cash flows, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Mild downward revision to net borrowings possible

“However, US Treasury plans to borrow a net USD823bn in Q1-2025, which is on the high side of expectation; part of this estimated borrowing is for building up cash balance though, from an estimated USD700bn at end-2024 to an estimated USD850bn at end Q1-2025.”

“Issuances are distorted by the debt ceiling deadline. Estimated end-2024 cash balance is consistent with the expiration of the debt limit suspension on 1 January 2025; the increase in estimated cash balance towards end Q1-2025 assumes enactment of a debt limit suspension or increase. Netting out the expected change in cash balance, the borrowing needs would be USD673bn.”

“In addition, USD75bn of the borrowing in Q1-2025 is due to SOMA redemption; should QT end earlier, there could be a mild downward revision to net borrowings. That all being said, uncertainties abound. Meanwhile, details on individual auctions are to be announced on Wednesday.”