US Buybacks Spark Skepticism as Trade Talks Collapse

The US Treasury's surprise buyback announcement has been met with skepticism over its scale and firepower. To address this, the Treasury has underscored that the increase represents at least a doubling of previous buybacks, and that it could do considerably more if needed.

Some have suggested using 'excess cash' in the Treasury General Account (TGA) to fund increased buybacks. The TGA currently stands at around $950bn, which is somewhat elevated relative to the previous administration's levels of $500-600bn.

A reduction in the TGA by $100-200bn could potentially provide significant temporary firepower for duration removal, but this would not be a free lunch and would require reducing the deficit over time.

The collapse of US-Canada trade talks has had a modest impact on Canada's economy, with Canadian GDP likely to be pushed slightly below potential in H2 2026. However, the impact on targeted industries will be severe, and this will likely affect public opinion beyond those directly impacted.