Market participants favor Treasury parking some cash in repo market

The TGA has also come under greater attention as the Treasury Department has upsized debt buyback operations in an attempt to counter rising borrowing costs. That effort has largely foundered, and some have speculated whether the Treasury might use TGA cash to augment its buyback efforts, though that could raise questions about the government paying for its activities by diverting cash from operational needs.

Participants in the New York Fed panel said that while they welcomed the prospect of government cash entering the market, they would appreciate some sort of process to make it predictable and understandable, rather than some random force that impacts market liquidity at unpredictable intervals.

This possible policy shift “could be an important stabilizer to the market even if it's not being used every single day,” said Jill Funk, a managing director at J.P. Morgan.