The US Treasury Department will keep borrowing at about its current pace for the rest of this year, because of uncertainty about the economy and tax policy, the department said Wednesday.
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Treasury Building
The Treasury had been scaling back its borrowing as tax receipts had risen and projected budget deficits dipped slightly. Officials said the Treasury might reduce borrowing again in 2011 but will keep it roughly level for the rest of this year.
The deficit reached $1.3 trillion in the 2010 budget year that just ended, down from a record-setting $1.42 trillion for the previous budget year.
Earlier this week, the Treasury Department said it would borrow $362 billion in the current quarter. That's down from an estimate of $380 billion in August.
The Federal Reserve is expected to announce later Wednesday that it will begin buying Treasury bonds to try to lower long-term interest rates. The Fed hopes that lowering those rates will spur more borrowing and spending. The Treasury's decision to maintain the size of its debt auctions is unrelated to the Fed's potential decision, a Treasury official said.
Treasury also said that it will offer more inflation-indexed securities, known as TIPS, to meet demand. Treasury plans to hold a TIPS auction every month and will also hold extra auctions of 5-year and 30-year TIPS.
The department also said Wednesday that it will auction $72 billion in long-term debt next week, including $32 billion in a three-year note next Monday, $24 billion in a 10-year note on Tuesday, and $16 billion in a 30-year bond on Wednesday, Nov. 10.