Earlier this afternoon, we wrote in our Treasury refunding preview that the Treasury's latest borrowing estimate published today (which is also part 1 of the Refunding statement), would show a surge in current quarter funding needs by over $400 billion, from $554 billion to $960 billion. 

It was short by almost $50 billion. We found that out moments ago when the Treasury published its estimate for marketable borrowing needs for the July-September 2025 and October-December 2025 quarters. 

According to the Treasury, during the current quarter, Treasury now expects to borrow $1.007 trillion in net marketable debt, assuming an end-of-September cash balance of $850 billion. The borrowing estimate is $453 billion higher than announced in April 2025, primarily due to the lower beginning-of-quarter cash balance and projected lower net cash flows.

Effectively what the Treasury did, is take the $449 billion expected surge in debt in Q2  - which did not happen - and which was supposed to push debt higher by $514 billion in the Apr-June quarter but instead only raised it by just $65 billion due to the ongoing debt ceiling impasse, and instead shoved it into Q3, where the previously expected $554 billion in debt increase this quarter and increase is by $453 billion, almost identical to the previously expected cash increase amount in Q2.

Excluding the lower than assumed beginning-of-quarter cash balance, the current quarter borrowing estimate is $60 billion higher than announced in April, which is not unreasonable, although it is disappointing in light of the roughly $25 billion in tariff revenues the Treasury is pocketing now. 

Looking further out, during the October – December 2025 quarter, Treasury expects to borrow $590 billion in net debt, assuming an end-of-December cash balance of $850 billion. This number is $90 billion below our estimate of $680 billion for calendar Q4.

Looking back, during the April – June 2025 quarter, Treasury borrowed $65 billion in privately-held net marketable debt and ended the quarter with a cash balance of $457 billion. In April 2025, the Treasury estimated borrowing of $514 billion and assumed an end-of-June cash balance of $850 billion. The $449 billion difference in privately-held net market borrowing resulted primarily from the lower end-of-quarter cash balance and higher net cash flows. Excluding the lower than assumed end-of-quarter cash balance, actual borrowing was $56 billion lower than announced in April. 

In summary, no big surprises today, and as expected, the refill of the Treasury General Account - which can only happen assuming there is a debt ceiling deal before Sept 30 - was the primary use of funds. And now we wait for details on the composition of the debt increase which will be published at 830am on Wednesday when the full Refunding Statement is published.