(Bloomberg) -- The US Treasury trimmed its estimate for federal borrowing for the current quarter, while continuing to expect a $700 billion cash balance at the end of the year, just before the federal debt ceiling kicks back in.

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The Treasury Department said in a statement Monday that it now estimates $546 billion in net borrowing for October through December, down from the $565 billion it had penciled in back in July. Officials’ year-end cash estimate was unchanged.

This quarter’s smaller borrowing need is largely a reflection of a bigger cash stockpile on hand at the end of September than the Treasury had expected. This was “partially offset by lower net cash flows,” the department said.

Dealers’ expectations for the new borrowing estimate had varied ahead of Monday’s release. Strategists at JPMorgan Chase & Co. expected a cut to $529 billion. But the team at BNP Paribas predicted an increase to $600 billion, based in part on October and November making up nearly a quarter of the federal government’s annual deficit — a gap that has been widening.

The Treasury’s cash balance at the end of September was about $886 billion, against the $850 billion the Treasury had targeted back at the end of July. That stockpile stood at about $834 billion as of Thursday.

Debt Limit

For the January-through-March quarter, the Treasury said it expects to borrow a net $823 billion, assuming a $850 billion cash balance at the end of the period. That would mark the biggest nominal amount of borrowing ever for that quarter, though not when adjusting for quarter-over-quarter cash balance changes.

Officials based those figures on the assumption that Congress will raise or re-suspend the debt limit. If lawmakers don’t act — and they typically fail to pass legislation ahead of time — the resumption of the ceiling then triggers a sequence of maneuvers by the Treasury to stay within the limit while continuing to pay government obligations. Officials provide guidance on those maneuvers to Congress as the process unfolds.

“We estimate that the Treasury will begin to limit bill supply in March 2025 and will cut bill supply aggressively in Q2,” a team of strategists a TD Securities including Gennadiy Goldberg wrote in a note. “With a debt ceiling increase or suspension likely in Q3, Treasury will then ramp up bill issuance aggressively as the cash balance is rebuilt to a more normal level.”