Treasury eyes $950B cash account to fund bond buybacks

Treasury eyes $950B cash account to fund bond buybacks

Mon, August 24, 2026 at 3:05 PM GMT+3 2 min read

The U.S. Treasury is considering using its near-$950 billion General Account to help fund its recently announced bond buyback program, according to CNBC, citing two senior Treasury officials. The officials said the account is considered available for purchases of off-the-run securities but declined to specify how much, if any, would be used or when an announcement might come.

The TGA, which functions as the federal government's primary operating account at the Federal Reserve, stood at roughly $950 billion as of the officials' comments — a figure that dwarfs the $550 to $600 billion level that the Biden administration had aimed to maintain. Treasury Secretary Scott Bessent built the balance to its current level, and officials said it is funded with existing tax collections.

The prevailing expectation in markets was that the purchases would be paid for through new short-term bill sales, an approach Bessent labeled a "Treasury Twist" during a CNBC appearance last week. The senior officials did not rule out that approach, but made clear the TGA represents an additional potential funding source.

Tapping the TGA could counter doubts expressed by analysts who have argued that the program lacks the scale to exert any real influence on long-term yields. Since the buyback announcement last week, bonds had retreated from an initial rally, pushing yields higher.

Officials indicated they do not view a partial TGA drawdown as creating any near-term cash management problem. Current projections put the next debt-ceiling bind sometime between next winter and early spring, which officials said provides a reasonable window to restore the balance before any constraint bites. Should the Treasury choose to hold the TGA near its current level after using some funds for buybacks, it would need to conduct additional debt sales to restore the account.

Treasury's announcement last week that it would at least double per-operation buyback sizes for longer-dated securities — raising the ceiling from $2 billion to at least $4 billion for 10-to-30-year securities — caught markets off guard, arriving two weeks after Treasury had published its quarterly buyback schedule. The enlarged operations are set to run from September 9 through November 4, 2026.

Treasury Secretary Bessent subsequently said operations could exceed even the new $4 billion ceiling, depending on market conditions. He framed the program as a liquidity measure, saying the 30-year sector had seen conditions he described as "very poor."

Officials rejected the charge that the out-of-cycle announcement undermined Treasury's commitment to orderly, predictable debt management, arguing that the formal auction calendar was left intact and that a roughly three-week gap before the September 9 start date gave investors ample time to adjust.