The U.S. Treasury could utilize its near $1 trillion General Account to help fund recently announced plans to increase purchases of government bonds, according to two senior Treasury officials cited by CNBC. The Treasury General Account functions essentially as the government’s checking account and rainy day fund held at the Federal Reserve, and is currently built up to around $950 billion by Treasury Secretary Scott Bessent, compared to a stated goal of $550 billion to $600 billion under the Biden administration.
Treasury Eyes Near $1 Trillion General Account to Fund Bond Buybacks
Using the account would provide the Treasury with substantial firepower to influence long-term bond yields. Officials noted that running the account somewhat lower would not appear to entail any immediate risk, though additional bonds would need to be sold to build the balance back up if the Treasury wished to maintain the near $1 trillion level. Senior officials did not rule out selling short-term bills to fund purchases, and they did not specify how much, if any, of the TGA would be utilized or when an announcement regarding its use might be made.
Expanding Long-End Buybacks Amid Market Pressures
The discussion around funding options follows a surprise announcement by the Treasury to double the size of buybacks of off-the-run securities on the long end from a $2 billion maximum to a $4 billion minimum per operation. Effective September 9, 2026, the Treasury Department is also increasing the frequency of operations in the 10-to-20-year and 20-to-30-year nominal coupon sectors from two to four operations per quarter. According to Yahoo Finance, the buyback program has repurchased $239 billion cumulatively since being relaunched in May 2024.
Treasury Secretary Scott Bessent stated that these operations could potentially be even larger than the new higher minimum. Bessent remarked on CNBC, We have a big toolkit so we’ll see,
adding that We believe that the yields don’t reflect the underlying fundamentals.
The intervention aims to lean against a severe stretch in the long-end bond selloff, during which the 30-year yield reached 5.31% on August 17, 2026—its highest level since 2007, approaching the 5.44% peak seen during the 2007–2008 financial crisis.
Broader Economic Pressures and Market Skepticism
The elevated yields have been driven by a confluence of factors, including investor anxiety over a $2.1 trillion deficit, 3.4% year-over-year inflation, heavy long-dated supply, policy uncertainty tied to Federal Reserve Chair Kevin Warsh’s hands-off approach to forward guidance, and a surge in corporate bond issuance from big tech companies funding AI data-center buildouts. Oil prices near $94 per barrel, up from roughly $72 before the war with Iran, have further stoked inflation concerns. According to HuffPost, interest rates rebounded following the initial market reaction, with the 10-year Treasury yield rising back to 4.69% and the 30-year yield rising to 5.23%.
Market participants have expressed skepticism regarding whether the Treasury can effectively backstop these yield movements. Treasury officials defended their announcement against criticisms that they abandoned regular and predictable auction schedules or were gaming the market, explaining that official auction schedules remained unchanged even though the enhanced buyback details arrived two weeks after the quarterly refunding announcement. Bessent also indicated that top officials would meet soon to forge plans improving the fiscal situation, with a new effort to reduce the government budget deficit anticipated.
