Bessent May Tap $1 Trillion TGA for Bond Buybacks as Treasury Doubles Long-End Purchases
Updated
Updated · CNBC · Aug 24
Bessent May Tap $1 Trillion TGA for Bond Buybacks as Treasury Doubles Long-End Purchases
3 articles · Updated · CNBC · Aug 24
Summary
$950 billion in Treasury cash could be used to fund expanded buybacks of off-the-run long-term bonds, senior officials said, giving Scott Bessent far more scope to press down long-term yields.
The option answers a key market question after Treasury last week doubled the minimum size of those buybacks to $4 billion from $2 billion without saying how they would be financed.
Using the TGA could counter skepticism that the program lacks firepower and reduce concern that the Federal Reserve might be drawn into the effort, though officials did not say how much cash would be used or when.
Treasury defended the Aug. 19 announcement against criticism that it broke its regular-and-predictable approach, saying auction schedules were unchanged and markets have until the first Sept. 9 operation to prepare.
Any drawdown would leave less cash for a future debt-ceiling standoff, but officials noted the next binding limit is not expected until winter 2027 or early spring, leaving time to rebuild the balance.