US National Debt Will Jump by $617 Billion in 5 Months
Just as the Fed accelerates its QE Unwind. Treasuries reacted.
While everyone is trying to figure out how to twist the new tax cut to their advantage and save some money, the US Treasury Department just announced how much net new debt it will have to sell to the public through the second quarter to keep the government afloat: $617 billion.
That’s what the Treasury Department estimates will be the total amount added to publicly traded Treasury securities — or “net privately-held marketable borrowing” — through the end of the second quarter. This will be the net increase in the US debt through the end of Q2. By quarter:
- During Q1, the Treasury expects to increase US public debt by $441 billion. It includes estimates for “lower net cash flows.”
- During Q2 – peak tax seasons when revenues pour into the Treasury – it expects to increase US public debt by $176 billion.
It also “assumes” that with these increases in the debt, it will have a cash balance at the end of June of $360 billion.
So over the next five months, if all goes according to plan, the US gross national debt of $24.5 trillion currently – which includes $14.8 trillion in publicly traded Treasury securities and $5.7 trillion in internally held debt – will surge to about $25.1 trillion.
That’s a 4% jump in just five months. Note the technical jargon-laced description for this (marked in green on the chart):
The flat lines in 2013, 2015, and 2017 are a result of the prior three debt-ceiling fights. Each was followed by an enormous spike when the debt ceiling was lifted or suspended, and when the “extraordinary measures” with which the Treasury keeps the government afloat were reversed. And note the current debt ceiling, the flat line that started in mid-December.
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