CNBC's Megan Cassella reports on news regarding the Treasury Department. The Treasury is expected to borrow a higher than earlier announced $1 trillion for the third quarter of 2025.

Washington

The U.S. Treasury Department has released its latest borrowing estimates, projecting it will borrow just over $1 trillion for the July through September quarter. This figure is $453 billion higher than the department's previous estimate, largely due to the need to replenish cash reserves that were depleted during the recent debt limit impasse.

Treasury officials explained that if the department had ended the previous quarter with its expected cash on hand, the increase in borrowing would have been minimal. Despite an expected rise in tariff revenue, borrowing remains elevated. The Treasury aims to restore its cash reserves to $850 billion by the end of the quarter and anticipates borrowing $590 billion in the following quarter.

U.S. Treasury expects to borrow $1T for Q3

We just do want to get some news, though, first out of the Treasury Department. Megan Kinsella has those details. Hi, Megan. Hey, Mike. So Treasury's latest borrowing estimates are out, and it's a big number this time, Treasury expecting to borrow just over a trillion dollars in the July through September quarter. That's $453 billion more than what they announced back in April. Now, Wall Street had been expecting borrowing to increase, but this is a bigger jump than estimates that I had seen. But Treasury officials do say this is almost entirely due to the now-resolved fight over the debt limit. So during that impasse on Capitol Hill, Treasury had to spend down some of its cash on hand, and now that the ceiling has been lifted, it's working to build its reserves back up. So they say if they had ended the second quarter with the $850 billion in cash on hand that they had expected, then Treasury's borrowing would only have been $4 billion more than the previous announcement. So Treasury yields so far not really reacting too much to this, just off their highs for the day at about 4-4. Now, Treasury says it does expect to get its cash on hand back up to the standard $850 billion level to end the upcoming quarter, Q3. That would set it up to borrow what they estimate would be $590 billion in Q4. Two quick things to note, Mike. These estimates do take into account the expected increase in tariff revenue this year. So just notable that borrowing is still elevated in spite of that increase in revenue. And this announcement, as you know, also sets us up to get the refunding announcement. That'll be 8.30 a.m. Wednesday morning.

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