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Treasury officials raise idea of using TGA for long-end buybacks

The piece argues that Treasury bond buying would function as government spending, not Fed-style quantitative easing, limiting the odds of a sustained rally.

Reported · Written up by our desk · Government Bonds

Mortgage News Daily reports that Treasury has highlighted a possible approach where the Treasury General Account, TGA, could be used to fund long-end buybacks, citing two officials.

The outlet describes the TGA as Treasury's bank account that receives funds from sources such as taxes, Treasury issuance, and tariffs, and it frames Treasury bond buying as government spending rather than a form of Fed quantitative easing.

According to Mortgage News Daily, while the policy could at best influence the yield curve, it cannot artificially suppress yields across the board, which is why the bond market is not expected to deliver a big, sustained rally solely on such news.

In addition, the outlet says the modest rally seen in the bond market is easier to attribute to a drop in fuel prices overnight than to the Treasury developments.

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