According to senior Treasury officials, the Treasury's General Account (TGA), currently around $950 billion, could be tapped to support its plan to double the buybacks of off-the-run securities from $2 billion to at least $4 billion. Treasury Secretary Scott Bessent indicated on CNBC that these operations might even exceed the new minimum.
The TGA acts as a reserve fund for the government, and its size is discretionary, allowing the Treasury to influence bond yields without immediate reliance on the Federal Reserve. Despite initial market skepticism following the surprise announcement, which led to rising bond yields, the potential use of the TGA could alter this perception.
The Treasury has maintained that its auction schedules remain unchanged, and the announcement was made with sufficient lead time for market adjustment. Bessent emphasized the goal of keeping the market focused on fundamentals rather than reacting to headlines, suggesting that upcoming fiscal improvements could further stabilize the situation