U.S. Treasury to Utilize Nearly $1 Trillion to Support Treasury Buyback Program

Senior officials at the U.S. Treasury have stated that the department will draw on nearly $1 trillion from its General Account to provide funding for the expansion of the Treasury buyback program. Utilizing the TGA account will enhance the Treasury's ability to influence long-term bond yields. Last week, the Treasury announced an increase in the buyback scale for long-term, non-newly issued bonds from $2 billion to at least $4 billion, which surprised the market. Treasury Secretary Yellen indicated that the actual operational scale might exceed this new threshold, but did not specify the exact source of the buyback funds. Most market participants anticipate that the Treasury will raise funds through the issuance of short-term Treasury bills, and senior officials at the Treasury did not rule out this option. According to BIT market data, U.S. Treasury bonds continued to rise, with the yield on the 10-year Treasury note falling by 4 basis points to 4.70%.

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