The U.S. Treasury could tap its roughly $950 billion Treasury General Account (TGA) at the Federal Reserve to help finance a bigger program of government bond buybacks, two senior Treasury officials told CNBC. No final decision has been announced on how much of the balance, if any, would be used or when such moves might occur.
The TGA is the government’s main operating account and currently holds about $950 billion, well above the roughly $550–$600 billion target seen under the prior administration. Officials said those funds could be available to support purchases of certain older, less frequently traded longer-term Treasurys—so-called off-the-run securities—under the Treasury’s recently expanded buyback program.
Last week the Treasury surprised markets by saying it would at least double the minimum size of buybacks of some off-the-run bonds to $4 billion from $2 billion. Secretary Scott Bessent told CNBC that purchases could exceed that $4 billion baseline, and officials indicated any use of the TGA would be limited to the off-the-run securities covered by the new program.
Markets initially assumed the Treasury would fund the larger buybacks by issuing more short-term bills and using the proceeds to buy longer-term notes—a strategy Bessent described as a “Treasury Twist,” pairing long-end purchases with short-end financing. Using the TGA would provide an alternative source of cash and might allow purchases without immediate equivalent short-term issuance.
Even modest use of the cash balance, or merely the knowledge that officials are willing to draw on it, could change investors’ views of how much firepower the Treasury has to influence longer-term yields. The buyback announcement briefly sparked a bond rally that later faded as investors questioned whether the program would be large enough to matter. Stronger demand for longer-dated Treasurys tends to push yields lower; the 10-year yield was about 4.71% on Monday morning, per CNBC data.
If the Treasury spends TGA funds, the government’s cash on hand would fall; restoring the balance later would require additional debt issuance. Officials said they see little immediate risk in a temporary decline. One rationale for maintaining a large TGA is to provide a cash cushion during a debt-ceiling standoff, though current estimates suggest the next binding debt-limit constraint is not expected until winter 2027 or possibly early spring, leaving time to rebuild reserves if needed.
Officials also said tapping the TGA could reduce speculation that the Federal Reserve might need to intervene to support the Treasury market. While the Fed holds the TGA, the account itself is not part of the central bank’s monetary policy toolkit.
The Treasury has pushed back on criticism that the surprise buyback increase undermined its commitment to being “regular and predictable.” The enhanced buybacks were announced on August 19, about two weeks after the quarterly refunding where such changes are typically disclosed. Treasury officials noted they did not alter the auction schedule, provided nearly three weeks’ notice before the first enhanced buyback on September 9, and outlined buyback plans for the quarter.
Bessent has urged investors to focus on economic fundamentals rather than headlines during a thin trading period. He and other senior officials expect the fiscal outlook to improve as tariff revenues recover after court-ordered refunds are replaced by new tariffs and as other fiscal measures are discussed. For markets, the key question remains whether Bessent will put some of the roughly $950 billion TGA balance behind the buyback program—an action that could materially increase the program’s perceived scale and its potential to influence long-term borrowing costs.
