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United States
Treasury Secretary Scott Bessent may deploy part of the Treasury General Account (TGA) to fund expanded long-dated bond buybacks.
The TGA is the federal government’s bank account at the Federal Reserve and carried a balance of $954 billion as of last Wednesday. The Treasury maintains a TGA buffer primarily as insurance against a temporary inability to issue debt.
Because the TGA is a Fed liability, a decline in the TGA with Fed assets unchanged produces an offsetting increase in bank reserves in a QE-like manner. However, the liquidity boost would be temporary, as investors would anticipate an eventual rebuilding of the Treasury’s cash balance, according to BCA Research.
Japan
The nominal JGB yield is now well above the dividend yield.
Asia-Pacific
The tech boom in Taiwan has not translated into happiness among consumers.
China
China’s widening “alligator jaws” reflect a surging current-account surplus increasingly offset by large portfolio outflows, as export earnings are recycled into foreign assets.
Equities
The recent spikes in long bond yields have sharply depressed earnings multiples, even though share prices have soared.
Rates
Shifting ownership bases—declining domestic demand in the UK, a fall in foreign US Treasury holdings, and France’s 57% nonresident share—could heighten sovereign-bond market sensitivity to changing investor confidence.
Commodities
Our model suggests CTAs have continued gold purchases and their overall positioning has turned positive.
Global Developments
US business investment is projected to rise 40% in real terms from 2021 through 2027, versus 12% in the euro area, widening the AI-driven technology and productivity gap.
