Treasury General Account

The Treasury General Account is the U.S.’s massive, super-official bank account. It’s where all the money comes from to pay for everything, courtesy of the U.S. Government.

The Federal Reserve includes 12 regional member banks...because the U.S. is kinda big. The leading bank of those 12 is the one in NYC: the Federal Reserve Bank of New York. The Federal Reserve Bank of New York holds the Treasury General Account, the U.S.’s checking account.

Besides being the checking account for the U.S. federal government (where all that tax revenue gets parked), the Treasury General Account also interfaces with monetary policy. Whether the Fed is aiming for economic expansion (increasing the money supply) or economic contraction (decreasing the money supply) depends on the state of the economy, and factors like inflation and unemployment. The money supply (all that money floating around in the economy right now) is controlled by the Fed selling or buying U.S. Treasury bills, which affects the Treasury General Account balance.