US Treasury mulls issuing 50-year bonds

WASHINGTON, July 18, 2019 (Xinhua) — File photo taken on July 15, 2019 shows U.S. Treasury Secretary Steve Mnuchin speaking during a press briefing at the White House in Washington D.C., the United States. Steven Mnuchin said Thursday that discussions between the White House and Congress on raising the federal debt ceiling have made progress, and that the market shouldn’t be concerned about the government defaulting on its payment obligations. (Xinhua/Ting Shen/IANS)

Washington, Sep 13 (IANS) US Treasury Secretary Steven Mnuchin said that his department was seriously considering issuing 50-year bonds as soon as next year.

“We’re looking at issuing a 50-year bond, what we could call an ultra-long bond. We think there is some demand for it. It is something we’ll very seriously consider for next year,” Xinhua news agency quoted Mnuchin as saying in a CNBC interview on Thursday.

“I personally think it would be a good thing to expand the US borrowing capabilities,” Mnuchin said.

“It’s obviously quite attractive for us to extend and de-risk the U.S. Treasury borrowing.”

Munchin said later in the day that the US Treasury could consider the possibility of 100-year bonds if 50-year bonds were issued and successful.

His remarks come a day after President Donald Trump tweeted on Wednesday that the US should start to refinance its debt, which has exceeded a record $22 trillion.

Mnuchin and his Department have been studying the possibility of issuing ultra-long bonds since he first took office in 2017.

Currently, the Treasury only issues 10-year and 30-year long-term bonds.

But the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association (SIFMA), a government-appointed panel of external experts, concluded in 2017 that “there is little evidence of strong or sustainable demand” for ultra-long bonds in the US markets.

The advisory committee also noted that foreign demand for ultra-long bonds was likely to be low, as foreign holdings of US Treasuries are predominantly shorter maturity.

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