#TreasuryEyesTGABuybacks

#TreasuryEyesTGABuybacks The U.S. Treasury is reportedly considering whether its Treasury General Account could help finance additional purchases of long-term government bonds. The TGA, effectively the government’s account at the Federal Reserve, contains roughly $935 billion to $950 billion. Treasury has already increased its long-duration buyback limit from $2 billion to at least $4 billion per operation, beginning September 9. The exact scale of any TGA-funded expansion remains unclear. Using the account could temporarily improve demand for long bonds and release liquidity into the financial system. However, this would not be Federal Reserve quantitative easing, and the Treasury cannot permanently solve high yields by rearranging its cash and debt maturity profile. Persistent deficits, heavy issuance and inflation expectations will continue influencing borrowing costs. Gold and Bitcoin could benefit if the policy weakens the dollar or is interpreted as financial repression. The market should wait for confirmed size and timing before treating the entire TGA balance as available stimulus.

This is the current discussion on Bessent buyback, the TGA, understanding of what makes US Treasury curve and rates, and even most maco economics and monetary economics here. I wonder what I am? The duck?

Cabana BofA: Our bottom line... TGA is a small Band-Aid solution, likely reversed with bills; other UST actions can address persistent long-end supply/demand balance. We like long 30Y asset swap spreads.

🚀JUST IN: $78K Bitcoin shocks as Bessent’s $1T war chest could crash yields. Treasury’s $950B TGA could fund long-end bond buybacks. CNBC confirms cash is officially available—no Fed needed. Will this push yields lower or just delay the next crisis?

Yesterday's stories about how the TGA may be used for buybacks and how Treasury will put the "fear of God" into bond vigilantes are "verbal intervention." But none of this stuff changes the basic problem. Our deficit is way too wide. That's the issue...

It's totally messed up! The U.S. Treasury might tap into that trillion-dollar "rainy day" fund! Bitcoin surges toward $100,000! Latest news: The U.S. Treasury may use nearly $1 trillion from the TGA account to buy back long-term government bonds. The 10-year Treasury yield immediately dropped 4 basis points to 4.70%. In plain terms — this is a disguised liquidity injection. With this move, the market has gone crazy👇#BTC80KHoldOrFold #IranSanctionsOilFalls #StrategyBuildsCash

I love how the $2b Treasury intervention was a “liquidity measure” until yields didn’t fall. Then we doubled it, hinted we’d go bigger, said we had “asymmetric information,” and pointed at the $1 trillion TGA as a backstop.

It's worth spelling out the mechanics of this as it pertains to the Fed. The TGA is a Fed liability. So are reserves. Spending the TGA swaps one for the other: a dollar out of the government's checking account is a dollar into the banking system. The Fed's balance sheet would not change size but its liability mix would, as reserves go up one for one. A year ago, with runoff (QT) still underway, a TGA drawdown would have been absorbed as a cushion against an active drain—the familiar debt-ceiling dynamic. Runoff ended in December and the Fed isn't doing reserve management purchases this month, so there's nothing else moving reserves at the margin now. Treasury's cash balance wouldn't be offsetting a policy operation. It would be the operation. This raises a couple of interesting issues. First, the Treasury secretary has frowned upon the ample reserves regime, but that regime may be exactly what makes this possible. Second, this type of operation doesn’t prevent but it could complicate efforts to shrink the Fed’s balance sheet, which is a policy objective of the new Fed chair. Reducing the Fed’s footprint has increasingly been framed as a liability-side endeavor. (I.E., you don't want to shrink assets below what liability demand requires, as this would introduce more volatility at the front end, so the work has shifted to lowering demand for reserves through bank liquidity regulation). Increasing reserves through the TGA drain pushes in the opposite direction.

【Schokkend】Waarom kan $BTC steeds nieuwe reboundhoogtes bereiken, al boven de 80.000, terwijl $ETH nog steeds rond de 2500 blijft liggen? We analyseren de specifieke redenen vanuit data en de psychologische strijd van marktliquiditeit. De kern is één zin: deze ronde geld is gezamenlijk in BTC gepompt door "macro devaluatiehandel + short squeeze + institutionele ETF's", terwijl ETH de overtollige secundaire liquiditeit ontvangt en zelf structurele nadelen heeft. 1. Drievoudige kapitaalsstroom in BTC, en allemaal vooral "BTC-exclusief" 1. Macro katalysator maakt BTC de "eerste begunstigde" De Amerikaanse schatkist breidt de lange termijn schuld terugkoop uit → zwakke dollar, dalende lange rente → "devaluatiehandel" herstart. Historische backtests tonen dat BTC en goud beide "fiat krediethedgeproducten" zijn, en instellingen kiezen als eerste voor BTC, niet ETH. Bridgewater's Dalio's verhaal van "het aanhouden van een kleine hoeveelheid BTC" versterkt het digitale goud-label, terwijl ETH's "wereldcomputer" label tijdens macro paniekperiodes weinig waard is. 2. Short squeeze richt zich vooral op BTC, vorige week werd ongeveer 4,6–7,2 miljard dollar aan crypto shorts geliquideerd, waarbij BTC het grootste aandeel had: BTC short posities werden passief teruggekocht bij stop-loss, wat de prijs verder opdreef; ETH liquidaties waren veel kleiner (dagelijks ongeveer 1/4 van BTC), dus het squeeze-effect was zwakker. 3. ETF kapitaal: BTC is de hoofdtoegang, ETH is de "bijbehorende positie". Spot BTC ETF netto-instroom 1,92 miljard (grootste week sinds oktober vorig jaar) ETH netto-instroom 697 miljoen. 【Zie bijgevoegde afbeelding voor meer gedetailleerde analyse】