Treasury General Account Surpasses $950 Billion, Fueling Expanded Bond Buybacks
The U.S. Treasury's checking account at the Federal Reserve has grown to approximately $950 billion—nearly double the Biden administration’s target of $550–$600 billion—and is now being used as a funding source for an expanded bond buyback program led by Secretary Scott Bessent. The Treasury announced it would increase its long-bond repurchase efforts, doubling them to at least $4 billion per week. This move has already pushed the 30-year U.S. Treasury yield up to 5.23%, a level not seen since 2007. The use of this large cash reserve raises concerns about reducing the government’s debt ceiling cushion, which is expected to be tested in late winter or early spring next year. Restoring the account would require additional bond issuance, potentially affecting market dynamics and borrowing costs. The Treasury defended its actions by stating that no official auction schedule was altered and that it provided sufficient notice of the buyback plan. The disclosure has sparked debate among analysts about whether this signals a shift in fiscal policy or simply an aggressive use of existing resources to influence bond markets.
Topics: bond buybacks debt ceiling Federal Reserve Treasury General Account