U.S. Treasury Considers Using $1 Trillion Cash Account to Fund Bond Buybacks, Driving Yields Lower

The U.S. Treasury Department is reportedly considering utilizing its roughly $1 trillion General Account (TGA) to help finance its recently expanded bond buyback program. This potential move, which could inject additional liquidity into the market without direct Federal Reserve intervention, contributed to a decline in Treasury yields on Monday. The 10-year Treasury note yield fell 4 basis points to 4.7%, while the 30-year yield retreated 4 basis points to 5.23%. The TGA, which serves as the federal government's primary operating account at the Federal Reserve, currently holds approximately $950 billion, surpassing the previous administration's target.