Business & Finance
Treasury considers using cash reserves to fund expanded bond buybacks amid yield pressures
US Treasury officials indicate the government could tap its near $1 trillion checking account to support long-term debt purchases after market interventions failed to permanently lower yields.
The short version
- Treasury Secretary Scott Bessent announced an increase in government buybacks of long-end off-the-run debt from $2 billion to at least $4 billion to curb rising borrowing costs.
- Treasury yields initially dropped before quickly rebounding, with 10-year yields reaching 4.74% and 30-year yields remaining near 20-year highs as analysts questioned the intervention's scale.
- Senior officials confirmed the Treasury could use its $950 billion General Account to fund operations, though no formal decision or allocation amount has been announced ahead of the Sept. 9 buyback.
Key facts
- Treasury Secretary Scott Bessent announced plans to double off-the-run long-end bond buybacks from $2 billion to at least $4 billion.[CNBC · The Guardian · CNBC]
- Two senior Treasury officials stated that the Treasury General Account, currently holding about $950 billion, is available to help fund the increased buybacks.[CNBC]
- An initial bond rally reversed shortly after the announcement, bringing 10-year Treasury yields back up to 4.74%.[CNBC · The Guardian]
- Federal debt has reached a record $40 trillion, with interest costs projected to represent 13.5% of total federal outlays in 2026.[The Guardian]
- The first operation under the enhanced buyback schedule is set for September 9.[CNBC]
What remains uncertain
- Treasury officials have not specified how much of the Treasury General Account will be spent on buybacks or when a decision will be disclosed.[CNBC]
- Market participants remain divided over whether buybacks will be financed via short-term bill issuance or cash reserves, and whether the operations are large enough to alter long-term yield trends.[CNBC · CNBC]