U.S. Treasury taps 950 billion Dollars from its account to fund bond buybacks, aiming to stabilize long-term yields amid oil-driven volatility.
The U.S. Treasury plans to use 950 billion Dollars from its General Account to fund long-end bond buybacks, targeting a sector that has seen a buyers’ strike since late June. The move follows an August 19 decision to double the ceiling on buyback operations to 4 billion Dollars per pass, though the impact has been limited by the scale of the market.
The Treasury General Account (TGA) currently holds 350 billion Dollars above its previous working level, with funds earmarked for repurchasing long-dated bonds. However, the operation swaps one government liability for another, shortening the average maturity of U.S. debt without reducing overall borrowing.
Markets reacted modestly, with the Dow Jones Industrial Average rising 0.3% to near 53,400, while the S&P 500 and Nasdaq Composite traded lower. The Treasury’s dual strategy of yield suppression and oil sanctions underscores its balancing act amid rising yields and geopolitical pressures.