US Boosts Borrowing to Raise Cash Before Next Budget Clash

Issuance of net marketable debt will be $266 billion in the October-to-December period, compared with $235 billion initially forecast on July 29, the department said Monday in Washington. The estimate assumes a cash balance of $140 billion on Dec. 31, a $60 billion increase from a July estimate and the largest quarter-ending cash target since 2011.

Disagreements in Congress over the nation’s fiscal direction are clouding the Treasury’s outlook for debt management this quarter and next. An Oct. 16 measure ended a partial government shutdown and suspended the nation’s debt ceiling until Feb. 7.

“The Treasury is being cautious as a large cash balance gives the Treasury more flexibility given the political risks with the debt ceiling that are not too far away,” said Ira Jersey, an interest-rate strategist in New York at Credit Suisse Group AG, one of the 21 primary dealers that trade with the Federal Reserve. “They would rather have too much and not need it then to have the opposite situation.”