The Treasury Department announced it would cut its estimate of federal borrowing for the quarter, an unexpected move that boosted bond and stock markets on Monday。

The Treasury Department said the new estimate of net borrowing from January to March was $760 billion, down from a previous forecast of $816 billion released at the end of October.。Meanwhile, the Treasury maintained its estimate of the Treasury's cash balance at the end of March at $750 billion.。After the news, Treasuries reached their highest point of the day, with the standard 10-year yield falling about 7 basis points to about 4 at 3: 30 p.m. New York time..07%。The S & P 500 also reached the day's high, up 0.7%。

The Treasury Department's announcement on the borrowing plan was seen as a market-driven event, which Bloomberg think tank Peter Bukwal wrote in a memo on Monday, due to the "huge accumulated debt and deficits."。NEW BORROWING ESTIMATES "DRIVE Treasury MARKET UP, STOCKS RISE WITH IT。"

The Treasury said the smaller borrowing requirements were due to projected net fiscal flows and higher-than-expected cash reserves at the beginning of the quarter.。However, a Treasury spokesman declined to elaborate on the improvement in fiscal flows relative to previous expectations.。

Analysts' views diverge on the amount of net U.S. Treasury borrowing this quarter。Jay Barry, co-head of U.S. interest rate strategy at JPMorgan Chase & Co., predicts that net borrowing for the quarter will reach $855 billion, assuming a closing cash balance of $750 billion。However, Ella Jessie, chief strategist at Bloomberg think tank U.S. interest rates, expects a decline, and he estimates net borrowing for the quarter at about $700 billion。

Sentiment boosted by falling yields over the past quarter as traders bet on a shift to easing in 2024。This trend will also reduce borrowing pressure on the Treasury, although the Treasury will still have to face the challenge of increased debt refinancing costs from rising policy rates since 2022.。In addition, the market is supported by a possible drawdown or end of the Fed's bond portfolio。