Bessent Says "No Treasuries Purchased Yet"... Treasury Considering Use of TGA

Considering Use of TGA as Buyback Funds
Wall Street Voices Concerns Over Undermining Treasury Management Principles

Scott Bessent, U.S. Secretary of the Treasury, has moved to further expand Treasury buybacks in an effort to suppress the rise in long-term Treasury yields, but has maintained a cautious stance regarding additional market interventions. However, concerns are being raised that the U.S. Treasury's consideration of using funds from the Treasury General Account (TGA)—which amounts to over $900 billion—as a source of funding for buybacks could undermine the United States’ principle of “regular and predictable” Treasury management.

Scott Bessent, U.S. Secretary of the Treasury. 2026.05.13. Photo by Dongju Yoon

At a press conference held at the U.S. Department of the Treasury headquarters in Washington, D.C. on the 24th (local time), Secretary Bessent was asked whether there were any plans to further increase the scale of Treasury buybacks. He replied, “We have not purchased a single Treasury yet.”

Since the expanded buyback program has not yet been implemented, Secretary Bessent refrained from commenting on the possibility of a further increase. This measure is set to take effect starting September 9.

Secretary Bessent also responded to a question about whether the Treasury was considering reducing the overall size of long-term bond auctions, saying, “We will continue the regular Treasury auction program.” He reaffirmed that any changes to debt management policy, including auction sizes, would be announced as scheduled in early November at the next Quarterly Refunding Announcement.

On August 19, the Treasury announced it would double the size of buybacks designed to boost liquidity in 10- to 30-year Treasuries from $2 billion to a minimum of $4 billion per operation. The maximum planned amount for long-term buybacks scheduled between September 9 and November 4 is $14 billion. Secretary Bessent also noted that this amount could be increased further in the future.

Considering Use of $935 Billion in TGA as Buyback Funds

The Treasury is also considering using the TGA to secure funds needed for the expanded buybacks. Quoting two senior U.S. Treasury officials, CNBC reported that the Treasury may utilize TGA funds to finance long-term Treasury buybacks.

The TGA is an account held by the U.S. federal government at the Federal Reserve, where federal cash collected from sources such as taxes is deposited. It acts as a cash buffer for government expenditures, including Social Security payments and payments to federal employees and government contractors.

As of August 20, the TGA balance stands at approximately $935 billion. The Treasury has maintained a sizeable balance in the TGA to prepare for unexpected financial market shocks or government outlays.

U.S. Department of the Treasury Website

Market participants had widely expected the Treasury to issue additional short-term Treasuries to finance the buybacks. Under this approach, funds raised from issuing short-term securities would be used to purchase longer-term Treasuries.

However, if the Treasury utilizes the cash accumulated in the TGA, it can buy back long-term Treasuries without issuing additional short-term securities. This approach would reduce the burden of increased short-term issuance while also alleviating supply pressures on long-term securities, which is why it is drawing market attention.

After news emerged of the potential use of the TGA, long-term Treasury yields fell. On this day, the 10-year U.S. Treasury yield dropped by about 4 basis points (1 basis point = 0.01 percentage points) during trading to around 4.69 percent. The 30-year Treasury yield, which surged above 5.3 percent last week to its highest level in nearly 20 years, also declined.

“Concerns Over Undermining the Principle of Regular and Predictable Treasury Management”

However, on Wall Street, there is concern that if the Treasury repeatedly changes policy to bring down long-term yields, it could undermine the core U.S. Treasury management principle of “regular and predictable” issuance policy.

For decades, the Treasury has maintained a practice of announcing any major changes to Treasury auction sizes, buyback programs, or cash balance policies through quarterly Treasury issuance plans and after thorough consultation with market participants.

However, just two weeks after releasing the quarterly buyback schedule earlier this month, the Treasury more than doubled the amount of long-term buybacks. This has led market participants to assess that Secretary Bessent is intervening in the Treasury market more actively than in the past in order to lower long-term rates.

Blake Gwinn, head of U.S. rates strategy at RBC Capital Markets, said of the potential use of the TGA, “It appears to be more of a somewhat ad hoc attempt to stem selling pressure in Treasuries than the result of thoroughly reviewing the cash balance policy.”

He added that in an environment where risks such as cyberattacks have increased, it is actually more important to secure sufficient cash buffers, so the likelihood of the TGA being used for buybacks is low.

This content was produced with the assistance of AI translation services.