The quarterly refunding report from the US Treasury was far from the issuance-bazooka that some had expected. There was no move in the target for the Treasury General Account either as we had expected, but it is not a reason to celebrate for bond bulls anyway. Let’s have a look at the details and the consequences for USD liquidity.

A few highlights from the Quarterly Refunding Statement

“During the October – December 2023 quarter, Treasury expects to borrow $776 billion in privately-held net marketable debt, assuming an end-of-December cash balance of $750 billion.”

“The borrowing estimate is $76 billion lower than announced in July 2023, largely due to projections of higher receipts somewhat offset by higher outlays.”

“During the January – March 2024 quarter, Treasury expects to borrow $816 billion in privately-held net marketable debt, assuming an end-of-March cash balance of $750 billion.”

For reference, the US Treasury borrowed a tad more than a trillion in Q3.

Chart 1: The TGA is already above target levels