CNBC, citing two senior Treasury officials, reports the US Treasury may tap
roughly $1 trillion in its Treasury General Account (TGA) at the Federal Reserve
to fund an expanded government bond repurchase program. Using the TGA would give
the Treasury greater ability to influence long-term yields. Last week the
Treasury unexpectedly raised repurchase size for off-the-run Treasures from
$2bn to at least $4bn; Treasury Secretary Bessent said operations could exceed
that floor, but the department did not specify funding sources. Markets had
largely expected funding via increased T-bill issuance; a TGA drawdown would
alter near-term supply and liquidity expectations. The TGA is the government’s
checking account at the Fed, financed by tax receipts.
