US bond market: USA could finance their bond buybacks from cash reserves
In his surprise move, US Treasury Secretary Bessent has left the financing open. According to a report, an account of the Treasury Department at the Fed could be tapped.
The US Treasury Department may use some of its cash reserves to fund the buyback of long-term government bonds, according to CNBC, citing two senior Treasury officials. The buyback program was recently doubled to at least $4 billion by Treasury Secretary Scott Bessent, following a rise in yields on these bonds to their highest level in years.
Currently, market participants assume that the Treasury Department will finance these purchases by issuing short-term debt instruments, such as T-Bills with a maturity of up to one year. The Treasury General Account, a cash reserve at the Federal Reserve, could also be used for this purpose.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
