--- title: "Bessent tapping Treasury's rainy-day fund for buybacks isn't a 'bazooka' to get markets to move his way" type: "News" locale: "en" url: "https://longbridge.com/en/news/296814017.md" description: "Treasury Secretary Scott Bessent's plan to use the Treasury General Account for bond buybacks is viewed by analysts as insufficient to significantly impact long-term yields or calm markets. Experts compare it unfavorably to past 'bazooka' interventions, noting the scale is too small relative to the $40 trillion national debt and rising yields. While some see short-term relief, many remain skeptical, viewing the move as unpredictable and lacking clear purpose amidst ongoing borrowing." datetime: "2026-08-24T16:52:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296814017.md) - [en](https://longbridge.com/en/news/296814017.md) - [zh-HK](https://longbridge.com/zh-HK/news/296814017.md) generator: "portal-rs" --- # Bessent tapping Treasury's rainy-day fund for buybacks isn't a 'bazooka' to get markets to move his way By Greg Robb and Joy Wiltermuth No material impact on long-dated yields from this, analyst says Treasury Secretary Scott Bessent has been trying to calm markets by buying back bonds. Reports that the Treasury Department could use its general account to buy back more of its longer-term government notes and bonds may be temporarily calming markets. But it's not as extreme of an intervention as Mario Draghi's "whatever it takes" pledge to preserve the euro or Ben Bernanke's bazooka program in response to the collapse of Lehman Brothers, experts say. Instead, even with the news that the agency may tap its general account, the buyback program remains relatively small, leaving analysts to question why Treasury Secretary Scott Bessent chose this moment to redouble his Treasury's efforts to calm markets. The national debt hit $40 trillion last week, just as yields on the 30-year Treasury bond hit 19-year highs. Last Wednesday, Treasury unexpectedly announced it would expand existing buyback plans to at least $4 billion in the eight total scheduled buyback operations through Nov. 4. Bessent said the plan was a "Treasury twist" designed to curb rising long-term yields, which he said didn't reflect underlying economic fundamentals. Molly Brooks, U.S. rates strategist at TD Securities, estimated that the increased buybacks would total about $14 billion more than initially expected. The move was viewed as offering some short-term relief to yields. But at the same time, it ran counter to the department's longstanding policy to remain regular and predictable in its management of government debt. "It seems they are willing to be less predicable than they once were," and adds to market anxiety, Brooks said Monday about talk of the Treasury tapping its general account instead of issuing more short-term debt. "We have to leave more options on the table," she added. "I think it's wait-and-see," said Brian Rehling, co-head of global fixed-income strategy at the Wells Fargo Institute, about whether Monday's easing yields will attract more buying of long-dated Treasurys. "Because we are still talking a bout a drop in the bucket in terms of Treasury debt out there," he said. "It hardly registers." Yields on the benchmark 10-year Treasury BX:TMUBMUSD10Y retreated by 4 basis points, to 4.7%, on Monday. That's still near the highs of 2026, as well as around the two-decade highs. Analysts assumed Treasury would pay for the buybacks by selling short-term T-bills. An article Monday by CNBC said that Treasury might use its general account fund for the purchases. "That's a policy choice that does not change anything. It just reduces the cash that Treasury has on deposit," Padhraic Garvey, regional head of research, Americas, for ING, said in a note to clients. "In terms of the bond market, there should be no material impact on long-dated yields from this," he added. The Treasury General Account is essentially its checking account where tax revenues are deposited and government spending is paid. Treasury also uses the general account as a rainy-day fund for emergencies. For more than a decade, Treasury has had a policy to keep cash on hand to cover five days of net projected outflows in the event of a cyberattack or other disruption, such as a debt-ceiling deadlock in Congress, said Lou Crandall, chief economist at Wrightson ICAP. Over the years, that fund has grown to close to $1 trillion. Robert Brusca, president of FAO Economics, said the source of the funds was a distinction without a difference. "Treasury can't invent money. If they think they have a pool of money someplace they haven't spent and they are tapping it, they won't be able to spend it on something else," Brusca said. Treasury will eventually have to borrow to replenish its general account. The response in the bond market shows traders remain unconvinced this buyback program is meaningful, said Joe Brusuelas of RSM LLP. "Treasury is not going to utilize its entire rainy day fund to fund its buyback program. This is not exactly Draghi-esque, a do-whatever-it-takes moment. This is not Ben Bernanke's bazooka," Brusuelas said. "You only tap such capital when there is an emergency. The 10-year bond trading at 4.7% and the 30-year bond trading at 5.2% hardly constitute as one," he added. Brusca said he didn't see the logic in Treasury buying back securities even as it continues to borrow in the market. "This is a plan without any purpose," like shifting a bag of sand in the back seat of your car to the trunk, Brusca said. In addition, it raises red flags that Treasury is worried something is wrong and Bessent is worried about letting investors transact in the Treasury market, he added. -Greg Robb -Joy Wiltermuth This content was created by MarketWatch, which is operated by Dow Jones & Co. 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