Alexa

Treasury to keep borrowing steady in 4th quarter

Treasury to keep borrowing steady in 4th quarter

The Treasury Department said Wednesday that 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 $1.3 trillion in 2010, down from a record-setting $1.42 trillion in budget year 2009.
The department said earlier this week that it will borrow $362 billion in the current quarter. That's down from an estimate of $380 billion in August.
The Federal Reserve is expected to announce later Wednesday that it will begin purchasing Treasury securities in an effort to lower long-term interest rates. The central bank hopes that lowering those rates will spur more borrowing and spending. The Treasury's decision to maintain the size of its debt auctions is unrelated to the Fed's potential decision, a Treasury official said.
Treasury also said that 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 5-year and 30-year TIPS.
The department also said Wednesday that it will auction $72 billion in long-term debt next week, including $32 billion in a three-year note next Monday, $24 billion in a 10-year note on Tuesday, and $16 billion in a 30-year bond on Wednesday, Nov. 10.