Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the Treasury General Account Could Calm the Bond Market
In this episode of The Macro Memo, Lucas and Luna dive into the surprising tool Treasury Secretary Bessent might use to calm the bond market: the nearly one trillion dollars sitting in the Treasury General Account. They explain what the TGA is, why its size has grown so large, and how tapping it to fund bond buybacks could affect short-term interest rates, bank reserves, and inflation expectations. Anchored in the latest data—the ten-year Treasury yield at 4.70 percent and a ten-year breakeven inflation rate of 2.34 percent—the hosts unpack whether this gambit is a clever liquidity operation…
The skinny
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