Treasury Raises Q2 2026 Borrowing Estimate to $189 Billion

The Treasury Department announced it expects to borrow $189 billion in the April-June 2026 quarter. The new estimate is $79 billion more than its February projection. After adjusting for a larger-than-expected cash balance at the start of the quarter, the new borrowing guidance for Q2 2026 is $122 billion higher than previously projected.

The department borrowed $577 billion during the January-March 2026 quarter. It expects to borrow $671 billion during the July-September 2026 quarter. Spring quarters typically require less borrowing because of tax-filing deadlines in April.

This filing season, Americans benefited from new tax breaks enacted in last year’s One Big Beautiful Bill Act. The Supreme Court struck down President Donald Trump’s global tariffs earlier in 2026. Importers have started getting refunds as a result, with as much as $166 billion that could be returned.

For Mark Malek, chief investment officer at Siebert Financial, the borrowing update illustrates the immense supply of fresh debt the Treasury Department is issuing. In a recent blog post titled “The bond market is shouting,” he pointed out that the Federal Reserve has cut the benchmark rate by 175 basis points since mid-2024.

Yet the 10-year Treasury yield has only dipped by about 35 basis points.

“That kind of disconnect is not normal,” Malek said. ” He attributed the pressure to three structural forces. U.S. interest costs on the debt are at $1 trillion per year.

The IMF warned that the “safety premium” on Treasury bonds is disappearing. “When you flood the market with supply and simultaneously chip away at the credit quality perception, bond buyers require higher yields to compensate,” Malek wrote. The term premium on Treasury bonds has widened from near zero and has recently been reasserting itself.