US Treasury Market Daily: Financing estimates could leave modest upside risks to FY27 deficit

Research evidence excerpt

US Treasury Market Daily: Financing estimates could leave modest upside risks to FY27 deficit

Jay Barry AC Global Markets Strategy

(1-212) 834-4951 03 August 2026 J P M O R G A N

john.f.barry@jpmorgan.com

Separately, Treasury announced its quarterly financing estimates, projecting $739bn in

net privately-held marketable borrowing in the current quarter, $68bn higher than its

previous estimate and $8bn above our $731bn forecast. Treasury also expects to borrow

$628bn in privately-held net marketable debt next quarter, $19bn above our projection,

but assumes an end-of-December cash balance of $850bn, $100bn below our $950bn

estimate (Figure 3Overthenexttwoquarters,Treasuryanounced$127bnmoreinborowingnedsthanwehadexpected,afteradjustingforcashbalanceasumptions). Cumulatively, Treasury’s financing needs are $127bn higher than

we estimated over this period, concentrated largely in the October-December quarter.

On margin, this would suggest some upside risk to our $1.96tn FY27 deficit forecast,

though we think it is too early to tell whether this stems from increased financing needs,

or from differing seasonality estimates around the timing of cashflows near year-end.

Either way, we do not think this afternoon’s announcement should impact the refunding

announcement Wednesday morning. With a large financing gap set to emerge in FY27

and beyond, we continue to think Treasury should remove “at least” from the long-

standing forward guidance, though political factors have made it increasingly likely that

Treasury will leave the forward guidance unchanged (see US Treasury Market Daily,

7/28/26).

Figure 3: Over the next two quarters, Treasury announced $127bn more in borrowing needs than we

had expected, after adjusting for cash balance assumptions