The government could start issuing 50-year bonds as early as next year as a way to help the government finance its growing debt load in a longer-term, less-expensive way, Treasury Secretary Steven Mnuchin said.
“This is something I have talked about over the last two years," Mnuchin told CNBC's "Squawk Box." "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.”
On Wednesday, President Donald Trump tweeted that he believes the United States should examine refinancing its debt load while lambasting Federal Reserve Chairman Jerome Powell and Fed members as "boneheads" and calling for interest rates to be dropped to zero or even lower.
Currently, the government only offers up to 30-year bonds, but several other countries have "ultra" bonds that reach from 40 to 100 years. Canada has had a 50-year bond since 2014, and Mexico, Belgium, and Ireland have 100-year bonds.
While Mnuchin was speaking with CNBC, Trump tweeted about the European Central Bank's move to cut its interest rates by "10 basis points" and said it is depreciating the Euro against the "VERY strong dollar" and hurting U.S. exports while the Fed "sits and sits and sits." Mnuchin said he is not surprised by the ECB move, but he does not agree with Trump on lowering rates below zero.
“If banks can’t make money, it’s hard to have a good economy," said Mnuchin. “I wouldn’t be surprised if a lot of people started selling foreign bonds at negative rates and buying U.S. Treasurys, which would have the impact of narrowing [yield] spreads."
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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