U.S. Treasury's Potential Use of Cash Balance Can Buy Time but not Fiscal Credibility
Dow Jones
Aug 25
0310 GMT - The U.S. Treasury's potential use of its cash balance can "buy time, but it cannot buy fiscal credibility," State Street Investment Management's Masahiko Loo says, noting a CNBC report citing two senior officials that the Treasury could use its General Account to fund increased buybacks announced last week. "Buybacks may improve market functioning and temporarily stabilize the [Treasury yield] curve, but they do not reduce the debt burden itself. Nor can they fully offset fiscal concerns, rising AI-driven capital demand, or the longer-term refinancing risks associated with greater reliance on bill issuance," the senior fixed-income strategist adds.
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