The Treasury's "unsportsmanlike" and Becent's trump card: a cat-and-mouse game about expectations
Just two weeks after the quarterly refinancing meeting, the Ministry of Finance suddenly announced "without playing fair" — doubling the scale of long-term government bond repurchases.
What about the promised "pattern and predictability" before?
Why can't we wait?
Because Becent was really anxious.
The yield on 30-year U.S. Treasuries once soared to 5.3%, the highest since 2007. The 10-year yield hovered above 4.7%.
What does that mean? The total U.S. national debt has just surpassed $40 trillion. Every extra basis point amounts to tens of billions in interest expenses every year.
This is a real headache.
So Becent revealed his trump card—the $950 billion TGA account.
What is the TGA? The U.S. government holds real cash reserves in the Federal Reserve's "current account." During Biden's administration, only $550 to $600 billion was deposited, but Baycent's move directly piled it up to $950 billion.
Why so many of them? Not for looks, but to wage war—to fight a battle to suppress long-term interest rates.
Bescent calls this a "Treasury Twist." But Bloomberg's macro strategist Simon White hit the nail on the head: using the TGA to buy long-term debt is no longer a distortion but a net liquidity injection.
What's the difference? Distortion is selling short and buying long, with money moving from one pocket to another, with total liquidity unchanged. But buying bonds with TGA means real money flows from the treasury into the market, which is like QE.
The question is—does the market trust it?
On the day the news broke, the 10-year Treasury yield briefly fell below 4.7%, hitting a low of 4.68%. And then? It rebounded.
The entire fluctuation was only a few basis points.
The market is telling Becent: "I know you have money, but I don't believe you can change the trend." ”
Why don't you believe it?
First, 950 billion is not 950 billion in idle money. The Treasury has to pay salaries, pay defense contracts, and repay maturing government bonds every day. What can actually be provided is probably only 100 to 200 billion. This amount is just a drop in the bucket in the 40 trillion US Treasury market.
Second, you just raised the third-quarter refinancing quota 16 days ago. Then you change your stance and say you want to expand buybacks. Chaotic communication is itself a confidence killer.
Third, the direct characterization of Castle Securities — this is called "financial repression." It forcibly lowers interest rates, weakens the attractiveness of dollar assets, pushes up import prices, and ultimately backfires on the dollar.
But the crypto market didn't wait for the Treasury Department to finish speaking.
Bitcoin surged over 20% in three days, reaching $80,000, marking its largest gain since 2023. Ethereum surpassed $2,500, rising more than 32% since the announcement.
Short positions were exposed at $7.2 billion. Spot Bitcoin ETFs saw weekly inflows of $1.92 billion, a 10-month high.
Why are Bitcoin and gold rising, and not US Treasuries?
Because smart money reads the underlying message—
When the Treasury can act unpredictably to lower interest rates, the dollar's credit premium is eroding.
Besent said, "We haven't even bought a single bond yet." But the market has already voted with its feet.
The debt ceiling crisis could come as early as next winter.
This means that for the next year and a half, the Treasury will have ample ammunition to play this game. Every "unsportsmanlike" raid, every deviation from the principle of "law and predictability," tells the world one thing:
The dollar is no longer the "rule-maker," but a "rule-breaker."
And Bitcoin—born to fight against this.
$BTC$ETH$XAU #财政部拟动用TGA, can long-term bond repurchases address the root cause?
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