Summary
- The U.S. Treasury could use its roughly $1 trillion TGA balance to expand long-term Treasury buybacks, according to the report.
- The Treasury said TGA cash balances could be used to fund an expanded Treasury buyback program, and it had doubled the minimum buyback size to $4 billion per operation.
- Expanding long-term Treasury buybacks could absorb more long-dated bonds in the market and add further downward pressure on long-term Treasury yields.
Forecast Trend Report by Period
The U.S. Treasury could use its roughly $1 trillion Treasury General Account, or TGA, balance to expand long-term Treasury buybacks, a report said. If implemented, the move could add further downward pressure on long-term Treasury yields.
Walter Bloomberg, an overseas financial news alert account, reported on August 24 that the Treasury said it could tap nearly $1 trillion in TGA cash balances to fund an expanded Treasury buyback program.
The Treasury had already doubled the minimum size of its long-bond buybacks to $4 billion per operation. Treasury Secretary Scott Bessent has also indicated that even larger buybacks may be possible.
Using the TGA balance would let the Treasury increase the market impact of the buyback program while reducing the need for Federal Reserve intervention.
A larger long-term Treasury buyback program could absorb more long-dated bonds in the market and help lower long-term Treasury yields.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.