Bessent could tap near $1 trillion Treasury General Account to fund bond buybacks, sources said - CNBC
Treasury officials are considering using the $1 trillion Treasury General Account to fund bond buybacks, a move intended to influence long-term yields. This strategy, dubbed a 'Treasury Twist,' aims to stabilize markets following skepticism over the Treasury's initial buyback announcement.
Why it matters
The use of the government's 'checking account' to manipulate bond yields represents a significant shift in fiscal policy that could impact global financial market stability.
The Treasury could use its near $1 trillion General Account to help fund its recently announced plans to increase purchases of government bonds, according to two senior Treasury officials.
Using the TGA would provide the Treasury with considerable firepower to influence long-term bond yields. The Treasury surprised markets last week with an announcement that it would be doubling the size of buybacks of off-the-run securities on the long end from $2 billion to at least $4 billion. Treasury Secretary Scott Bessent said on CNBC such operations could be even larger than the new higher minimum.
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