WASHINGTON (Reuters) – The U.S. Treasury Department on Monday said it plans to borrow much less in the second quarter than it previously expected as the Federal Reserve ends a plan to reduce its own holdings of U.S. debt securities.

In a statement, Treasury said it will borrow $30 billion during the April-June period, less than half its previous estimate of $83 billion.

It said the drop was due to changes in “fiscal activity” and new assumptions of the cash it will need to keep on hand.

A Treasury official who asked not to be identified said the fiscal change related to the Fed’s plans to stabilize its massive portfolio of bonds relative to the size of the U.S. economy.

Changes to the Fed’s balance sheet policy have had big impacts on the Treasury’s borrowing needs since the central bank ramped up purchases of Treasury securities around the 2007-09 recession in a bid to support the economy.

For years, the Fed’s added purchases of U.S. debt securities eased the Treasury’s need to borrow from the public. Then, in 2017, the Fed began trimming its balance sheet, which led the Treasury to increase its public borrowing.

In March, the Fed said it would soon begin ending a program to trim its holdings of U.S. securities. That effectively will make the U.S. central bank a bigger buyer of U.S. Treasury securities relative to recent months.

Treasury said it expects to borrow $160 billion during the July-September quarter. It borrowed $374 billion through credit markets in the January-March quarter, ending the period with $334 billion in cash. It expects to end the April-June quarter with $270 billion in cash.

Additional details of Treasury’s quarterly refunding will be announced at 8:30 a.m. EDT (1230 GMT) on Wednesday.

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