US Treasury is considering issuing 100-year bonds

UNITED STATES, WASHINGTON (OBSERVATORY) — US Treasury Secretary Stephen Mnuchin said on Thursday the launch of 50- to 100-year Treasury bills was under “very serious consideration”.

“If the conditions are right, I expect that we will benefit from long-term borrowing and do it,” Mnuchin said in an interview with Bloomberg International.

The issuance of long-term bonds runs the risk of falling demand throughout the economic cycle.

Buyers may be eager to buy long-term bonds, when yields are high, but in recessions when the US Federal Reserve cuts demand may evaporate, pushing government borrowing costs higher across different maturities.

For the Trump administration, issuing extremely long-term debt would reduce the cost of taxpayers to fill the $ 1 trillion budget deficit annually, according to Bloomberg.

The US Treasury issues bonds with yields with maturities ranging from two to 30 years.

Mnuchin said his renewed interest in issuing long-term bonds had nothing to do with lower US short-term debt yields.

The yield on US 30-year Treasuries recently fell below 2 percent for the first time and continued to fall to a record 1.90 percent on Wednesday.


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