A CNBC report on the morning of August 24, citing two unnamed “senior Treasury officials,” said Treasury Secretary Scott Bessent could tap the near $1 trillion Treasury General Account to fund the department’s bond buybacks. The report’s headline read: “Bessent could tap near $1 trillion Treasury General Account to fund bond buybacks, sources said.” The news spread quickly from there, picked up across financial media with varying headlines.

Wolf Street, in a commentary on the report, argues that the framing obscures a basic mechanical reality. The Treasury General Account (TGA), held at the Federal Reserve Bank of New York, is the only checking account the US government has. Every single dollar the government spends on anything comes out of the TGA — tax refunds, military salaries and hardware, the payoff of maturing bonds, and everything else — and every dollar the government takes in, from taxes and Treasury auctions alike, goes into it. Treasury must “tap” the TGA for every dollar it spends, which raises the question of where else the money for the buybacks would come from.

The implication of the report, Wolf Street notes, is that Treasury would not have to sell T-bills — Treasuries maturing in 1–12 months — to fund these buybacks, but could simply draw down the balance in the checking account. Treasury’s buyback program, launched in 2024, involves repurchasing older, off-the-run securities while issuing new debt. The program’s stated aim is to support liquidity in the Treasury market — the largest government bond market in the world — where off-the-run securities, replaced at auction by newer issues, trade far less actively than freshly issued on-the-run ones.

Huge amounts of funds run through the account every day. In one recent week, Treasury sold $742 billion in securities at auctions, generating $742 billion in inflows as those transactions settled. Hundreds of billions of dollars in securities also mature every week and have to be paid off, producing huge outflows — which is why the balance has to be large enough to serve as a buffer for these massive and seasonal flows. Because government spending flows out into the banking system while tax and auction proceeds draw cash back in, swings in the TGA also move bank reserves — one reason money-market participants track the account’s level closely.

In its Quarterly Refunding Statement on August 5, Treasury said the following about the TGA balance:

“Treasury is assuming a $950 billion cash balance at the end of September. However, based on current projections for the upcoming refunding quarter, Treasury estimates that the size of the Treasury General Account (TGA) could peak at $1.05 trillion (plus or minus $50 billion) in late October. This figure is consistent with Treasury’s long-standing cash balance policy and is driven by the large outflows expected to occur at that time.”

The government can draw down the TGA, as it does periodically, but eventually it has to refill the account through rapidly increased debt issuance, Wolf Street writes. Treasury restates its cash-balance assumptions each quarter in these refunding statements, giving readers a recurring public checkpoint on how the target evolves as the buybacks continue and the debt ceiling approaches.

The approaching debt ceiling sharpens the stakes. The government will hit the debt ceiling of $41.1 trillion late this year or early next year, and unless Congress immediately raises it, the government will have to draw down the TGA to fund deficits arriving at a pace of $1 trillion every 3–5 months. If Congress fails to raise the ceiling for long enough, Treasury would draw down the TGA all the way to the last moment before it runs out of money.

Drawing down the TGA in September and October to fund the Treasury buybacks — just before hitting the debt ceiling — would leave less cash to bridge the debt ceiling debate and less time before cash runs out during it, Wolf Street argues. And once the ceiling is resolved, Treasury would have to issue $2 trillion in new debt in all haste within a few months to refill the TGA and fund the deficits.

The United States just went through this dynamic in 2025. In the six months after the debt ceiling was resolved at the beginning of July 2025, Treasury added $1.8 trillion to the publicly traded Treasury securities — a precedent Wolf Street asks whether the people at CNBC have already forgotten.

There are currently $936 billion in the TGA. The account’s level is published in public data — the Federal Reserve’s weekly balance-sheet releases and Treasury’s daily cash statements — so any drawdown used to fund buybacks would show up quickly in the numbers. During past debt ceiling periods, the account has been drawn down to precarious levels — and occasionally, as in 2023 and 2021, to what Wolf Street describes as nerve-wracking levels, with the government essentially out of money before the debt ceiling was resolved, followed by massive issuance of Treasury securities to refill the account.

Wolf Street’s bottom line: “There is simply no escape: Buybacks have to be funded with new issuance. All Bessent can do is shift the timing around a little, but that would increase the debt ceiling risks.”

The site is blunt in its criticism of the coverage, describing CNBC as “always eager to carry manipulative stuff from sources” and as “just regurgitating Bessent’s effort to push down long-term Treasury yields by hook or crook.” Wolf Street has taken to calling such episodes “Bessent’s Hocus-Pocus shows,” numbering them to keep track; the CNBC report is Hocus-Pocus #3. The two prior shows so far in August were Hocus-Pocus 1 — the joint US-Japan yen intervention, confirmed on August 3 — and Hocus-Pocus 2 — the August 19 announcement of a doubling of the Treasury buybacks.

In Wolf Street’s assessment, none of these hocus-pocus shows addresses the actual issues that the bond market faces: a flood of new debt coming at it at a pace of $1 trillion every 3–5 months that it must absorb “come hell or high water,” inflation, and rising uncertainty. Rather than addressing those issues, the site argues, Bessent’s hocus-pocus shows contribute to that uncertainty.

Source: Wolf Street