The U.S. Treasury may tap its roughly $950 billion General Account (TGA) to help fund larger purchases of U.S. government bonds as long-term yields climb. Two senior Treasury officials stated that the cash is available following a recent decision to double planned buybacks of older, off-the-run long-dated securities from $2 billion to at least $4 billion per operation.
Treasury Secretary Scott Bessent indicated that those purchases could exceed the new minimum. While the Treasury did not specify how it would pay for the expanded buys, traders expect potential short-term bill sales. Bessent referred to the plan as a “Treasury Twist,” involving the purchase of longer-term Treasurys and the potential issuance of shorter-term debt.
The TGA, the government's primary cash account at the Federal Reserve, holds tax collections and currently sits near $950 billion, exceeding the previous administration's target range of $550 billion to $600 billion. Officials did not disclose how much of the TGA might be utilized, when an announcement could arrive, or whether the funds would support purchases beyond off-the-run securities. Treasury officials also rejected claims that the agency has abandoned its regular and predictable approach to debt sales, noting that the auction schedule remained unchanged.
New Financial Measures Against Iran
In addition to debt management updates, the U.S. is scheduled to unveil new financial measures against Iran. Washington and Tehran missed a 60-day ceasefire window to reach an agreement as the Middle East conflict entered its sixth month.
Bessent stated that the upcoming actions represent an economic offensive aimed at severing economic lifelines sustaining the Iranian regime. The new measures will build upon existing sanctions targeting Iran's banking, energy, aviation, and cryptocurrency sectors. The Iranian rial recently reached a new open-market low, trading above 2 million rials per U.S. dollar, amid what the Trump administration describes as runaway inflation and a sharp economic decline.
