The US Treasury may use the Treasury General Account, or TGA, which holds nearly $1 trillion, to help finance its recently expanded government bond repurchase program, CNBC reported, citing two senior Treasury officials. The move would give the department greater ability to influence longer-term bond yields.
Last week, the Treasury unexpectedly said it would raise buybacks of long-dated off-the-run securities from $2 billion to at least $4 billion. Treasury Secretary Bessent said the size of those operations could exceed that new minimum, though the department did not explain at the time how the purchases would be funded.
Before this report, most market participants had expected the Treasury to raise money by increasing issuance of short-term Treasury bills. If the department instead draws on the TGA, that could alter how the market views the plan. The TGA is effectively the US government’s checking account at the Federal Reserve, and the funds in it come from existing tax revenue.
The US Treasury may tap the Treasury General Account, or TGA, which holds nearly $1 trillion, to help fund its recently expanded government bond buyback program, CNBC reported, citing two senior Treasury officials.
Using the TGA would give the Treasury more power to influence long-term bond yields. Last week, the department unexpectedly said it would increase repurchases of long-dated off-the-run securities from $2 billion to at least $4 billion.
Treasury Secretary Bessent said the size of those operations could go beyond that new minimum. At the time, though, the Treasury did not say how it planned to pay for the purchases.
Most market participants had previously expected the department to raise the money by issuing more short-term Treasury bills. If the Treasury uses the TGA instead, that could change how the market sees the program.
The TGA is essentially the US government’s checking account at the Federal Reserve, functioning like an emergency cash pool. The money in the account comes from existing tax revenue.
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