Treasury anticipates borrowing $104B from July to September to pay bills, cope with budget deficit.

The Treasury Department said Monday that it expects to have to borrow about $104 billion from investors over the three months starting in July to pay government bills to cope with a burgeoning budget deficit.

As part of its quarterly borrowing estimates, the Treasury also said it anticipates needing to borrow about $126 billion in the October-December quarter. The record high for borrowing is $111 billion, which was set in the January-March quarter of this year.

The amount the government expects to have to raise in the July-September quarter was revised from $76 billion estimated in April. In the just concluded April-June quarter, the Treasury borrowed $60 billion.

"The increase is due to somewhat lower receipts and higher outlays," the Treasury said in an announcement.

Through the first nine months of the government's budget year, it has run up a deficit of $270.5 billion.

Treasury prices have been falling on the back of a five-week high on the Dow Jones industrial average, reached Friday, and increased evidence that economic growth is picking up. Increasing the amount of government debt for sale will further pressure bond prices, thereby making Treasurys less attractive to investors, because the supply spike will lessen the value of existing notes.