One of the reasons why Trump and Congress were so quick to pass a debt ceiling deal last week is that had they failed to do so, with the Treasury's cash balance sliding precariously lower and expected to hit $0 by early September, there was a non-trivial chance the US could technically default by the time Congress came back from its August vacation.

Of course, that did not happen, a debt ceiling extension deal was reached, and as a result the Treasury is now free to start reloading its cash balance, and it plans on doing just that. On Monday, the Treasury Department announced its latest quarterly estimates of net marketable borrowing needs for the current (July – September 2019) and upcoming (October – December 2019) quarters. What it revealed was the following:

After borrowing just $40 billion in the past, April-June period, which left the Treasury with a quarter end cash balance of $264 billion, in the current quarter, the Treasury now expects Treasury issuance to explode higher, and borrow a whopping $433 billion in net marketable debt, a massive $274 billion higher - or more than doubling - its prior forecast announced in April 2019.

The reason for this debt issuance flurry? To rebuild the cash balance back to a level of $350 billion, which is where the Treasury expects its end-of-September cash balance to be, up from just $85 billion as of the April 29 forecast.