US Rates Watch

Latest edition · August 24, 2026

US Rates Watch TGA, buybacks, & activism = bullish steps

Treasury Secretary Bessent is pursuing activist debt management by exploring TGA-funded buybacks and pledging to stabilize the long end. BofA views TGA funding as a minor stopgap that will likely be rebuilt with bills, but supports the long-end supply adjustments and recommends long 30Y asset swap spreads.

Following reports that Treasury Secretary Bessent could tap the Treasury General Account (TGA) to fund bond buybacks and do 'whatever it takes' to lower long-end rates, BofA analyzes the capacity and market impact. The TGA currently holds $935bn against a 1-week outflow requirement of around $890bn, leaving only an ~$80bn to $100bn buffer before risking liquidity stress. BofA views TGA drawdown as a temporary measure that will eventually be rebuilt via bill issuance. However, the broader activist push to balance long-end supply and demand increases the probability of 20Y and 30Y auction size cuts by November, leading BofA to recommend long 30Y asset swap spreads (entry -68bp, target -55bp).

Key takeaways from the latest edition

• 1.Using the Treasury General Account (TGA) to fund buybacks is only a small temporary measure (~$80b to $100b capacity) that will ultimately need to be rebuilt via Treasury bill issuance.
• 2.Treasury Secretary Bessent's activist approach aimed at lowering long-end yields should help rebalance long-end UST supply and demand, raising the risk of 20Y and 30Y auction size cuts in November.
• 3.BofA recommends going long 30Y asset swap spreads at -68bp with a target of -55bp as long-end supply/demand rebalances and richens bonds.

What this series covers

• TGA buyback funding & long-end supply / demand fixes
• TGA buyback funding = band aid until more bills
• “Whatever it takes” = bond supply / demand balance
• UST long end focus = own 30Y asset swap spreads

Edition archive

• US Rates Watch TGA, buybacks, & activism = bullish steps

  August 24, 2026

• Short and strong Sliding shorter

  July 26, 2026

• BofA US Rates Watch Caught between a strait and a Warsh place 20260614

  June 14, 2026