The U.S. Treasury is weighing whether to use its roughly $1 trillion General Account to help pay for its expanded bond buyback program, according to CNBC, citing two Treasury officials. The officials did not say how much of the account would be used.
Monday's report pushed the 10-year Treasury note yield down 4 basis points to 4.7%. The 30-year yield, which last week reached its highest point since 2007, retreated 4 basis points to 5.23%.
The Treasury General Account functions as the federal government's primary operating account at the Federal Reserve. The account stood near $950 billion — well above the $550 to $600 billion level the prior administration had aimed to maintain — and Treasury Secretary Scott Bessent built the balance using existing tax collections. The prevailing market expectation had been that buyback purchases would be funded through new short-term bill sales, an approach Bessent described as a "Treasury Twist." The senior officials did not rule out that approach but indicated the General Account represents an additional potential funding source.
Officials said they do not view a partial drawdown of the account as creating a near-term cash management problem, with the next debt-ceiling constraint not expected until sometime between next winter and early spring, according to CNBC.
The report follows Treasury's announcement last week that it would at least double the maximum size of its per-operation bond purchases for longer-dated securities, raising the ceiling from $2 billion to at least $4 billion for the 10-to-20-year and 20-to-30-year portions of the market. Treasury set the window for those larger operations to begin September 9 and close November 4. Yields dropped after the announcement before rebounding, with the 30-year yield giving back most of Wednesday's decline by Thursday, as ******* ysts questioned whether the program was large enough to alter the balance of supply and demand in a $32 trillion market.
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Monday's report pushed the 10-year Treasury note yield down 4 basis points to 4.7%. The 30-year yield, which last week reached its highest point since 2007, retreated 4 basis points to 5.23%.
The Treasury General Account functions as the federal government's primary operating account at the Federal Reserve. The account stood near $950 billion — well above the $550 to $600 billion level the prior administration had aimed to maintain — and Treasury Secretary Scott Bessent built the balance using existing tax collections. The prevailing market expectation had been that buyback purchases would be funded through new short-term bill sales, an approach Bessent described as a "Treasury Twist." The senior officials did not rule out that approach but indicated the General Account represents an additional potential funding source.
Officials said they do not view a partial drawdown of the account as creating a near-term cash management problem, with the next debt-ceiling constraint not expected until sometime between next winter and early spring, according to CNBC.
The report follows Treasury's announcement last week that it would at least double the maximum size of its per-operation bond purchases for longer-dated securities, raising the ceiling from $2 billion to at least $4 billion for the 10-to-20-year and 20-to-30-year portions of the market. Treasury set the window for those larger operations to begin September 9 and close November 4. Yields dropped after the announcement before rebounding, with the 30-year yield giving back most of Wednesday's decline by Thursday, as ******* ysts questioned whether the program was large enough to alter the balance of supply and demand in a $32 trillion market.
#year #billion #market #cnbc
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