State Street senior fixed-income strategist Masahiko Loo said the U.S.
Treasury’s potential use of its general account to fund recently announced
Treasury buybacks “can buy time but cannot buy fiscal credibility.” CNBC, citing
two senior U.S. Treasury officials, reported the Treasury may tap its general
account for the increased buybacks. Loo said buyback operations could improve
market functioning and temporarily stabilize the yield curve, but would not
reduce the underlying debt burden or fully offset fiscal concerns, rising
AI-driven capital demand, or longer-term refinancing risk from heavy reliance on
short-term Treasury issuance.
