How the Federal Reserve Funds the Government Without Congress

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · May 21, 2026 · 8m · transcript

When Congress can't agree on spending, the Treasury turns to a surprising source: the Federal Reserve. This episode unpacks the Treasury General Account — the government's checking account — and how its balance swings from $100 billion to over $800 billion, draining liquidity from markets. Lucas and Luna explain why the TGA matters for bond yields, repo rates, and your 401(k). They walk through the 2023 debt-ceiling standoff as a case study, showing how Treasury drained $450 billion from the TGA in weeks, and why a similar dynamic is playing out in May 2026. Plus: a look at the…