The Treasury, which issued a record amount of debt in the past year to fund the surging federal budget deficit, said it will borrow less in the third quarter than it had previously expected, in part because banks repaid billions of dollars of government aid under the Troubled Asset Relief Program.
The Treasury said it plans to borrow an estimated $406 billion in the quarter, $109 billion less than it had estimated. It expects to end September with a cash balance of $270 billion.
The government also borrowed less in the second quarter than expected, issuing $343 billion in debt, compared with earlier estimates of $361 billion.
The Treasury was able to cut its expected borrowing because it ended the quarter with a cash balance of $318 billion, more than it expected because of the TARP repayments as well as fewer purchases of preferred shares of Fannie Mae and Freddie Mac.
Banks including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have repaid more than $70 billion from the aid program. In last year's third quarter, the Treasury borrowed $530 billion as it pumped money into the flagging economy, which has recently shown some signs of stabilization.
The U.S. will have borrowed an estimated $1.39 trillion this year through the end of September, according to Treasury data.
"The available data suggest that the recession's grip on the economy is easing," said Alan Krueger, the Treasury's assistant secretary for economic policy and its chief economist.
The Treasury-bond market sold off Monday, but many attributed the drop to an ever-increasing appetite for risk among investors in stocks and other assets like high-yield, or "junk," bonds.
The reductions don't erase the Treasury's expected overall borrowing needs as the U.S. budget deficit remains estimated at $1.8 trillion. Some analysts have noted that with the unemployment rate on the rise, the deficit could widen further, despite U.S. officials' commitments to rein in spending.
"Even if outlays slowed for now, we're likely to bump up against our debt ceiling," said William O'Donnell, chief Treasurys strategist at RBS Securities.
The Treasury also reported it expects stimulus funds to flow more slowly into the economy than it previously expected.
The Treasury said it plans to borrow an estimated $406 billion in the quarter, $109 billion less than it had estimated. It expects to end September with a cash balance of $270 billion.
The government also borrowed less in the second quarter than expected, issuing $343 billion in debt, compared with earlier estimates of $361 billion.
The Treasury was able to cut its expected borrowing because it ended the quarter with a cash balance of $318 billion, more than it expected because of the TARP repayments as well as fewer purchases of preferred shares of Fannie Mae and Freddie Mac.
Banks including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have repaid more than $70 billion from the aid program. In last year's third quarter, the Treasury borrowed $530 billion as it pumped money into the flagging economy, which has recently shown some signs of stabilization.
The U.S. will have borrowed an estimated $1.39 trillion this year through the end of September, according to Treasury data.
"The available data suggest that the recession's grip on the economy is easing," said Alan Krueger, the Treasury's assistant secretary for economic policy and its chief economist.
The Treasury-bond market sold off Monday, but many attributed the drop to an ever-increasing appetite for risk among investors in stocks and other assets like high-yield, or "junk," bonds.
The reductions don't erase the Treasury's expected overall borrowing needs as the U.S. budget deficit remains estimated at $1.8 trillion. Some analysts have noted that with the unemployment rate on the rise, the deficit could widen further, despite U.S. officials' commitments to rein in spending.
"Even if outlays slowed for now, we're likely to bump up against our debt ceiling," said William O'Donnell, chief Treasurys strategist at RBS Securities.
The Treasury also reported it expects stimulus funds to flow more slowly into the economy than it previously expected.
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