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Treasury Eyes $950B Account for Bond Buybacks
24 Aug
Summary
- US Treasury may use its $950 billion General Account for bond buybacks.
- This account is typically for government operations, not securities purchases.
- The buyback program has been expanded significantly since last week.
The U.S. Treasury is reportedly considering utilizing its approximately $950 billion General Account (TGA) as a funding source for its recently enhanced bond buyback initiative. Senior Treasury officials indicated that the TGA, which serves as the federal government's main operating account at the Federal Reserve, could be drawn upon for purchasing off-the-run securities. This approach contrasts with the market's expectation that new short-term bill sales would solely finance the program.
The expanded buyback operations, which doubled per-operation sizes for longer-dated securities to at least $4 billion from September 9 through November 4, 2026, caught markets by surprise. Officials suggest that using a portion of the TGA would not create near-term cash management problems. Projections indicate a potential debt-ceiling constraint between winter and early spring, allowing time to replenish the TGA balance if needed.
