Bank of America: TGA Buyback Capacity & US Treasury Long-End Supply Strategy

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.

Key Takeaways

• 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.

Table of Contents

• 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

Report data

Exhibit 3: Spread between TGA & actual 5D outflow ($bn)

Reports in this series

US Rates Watch is shown in chronological order through this edition, published on August 24, 2026.

Part of the US Rates Watch series — view all 3 editions

1. Jun 14BofA US Rates Watch Caught between a strait and a Warsh place 20260614
2. Jul 26Short and strong Sliding shorter

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