Mnuchin to Wall Street: U.S. Is Serious About Ultra-Long Bonds
- Ultra-longs could help finance infrastructure spending plans
- Dealers, former officials see a 50-year bond as most likely
Treasury Secretary Steven Mnuchin discusses the interim budget agreement, creating economic growth and bank regulation with Bloomberg Editor-in-Chief John Micklethwait at the Milken Institute Global Conference. (Source: Bloomberg)
From the moment that Steven Mnuchin first hinted back in November that the Trump administration would entertain the idea of selling ultra-long bonds, the consensus across Wall Street was pretty clear: Don’t do it. There’d be no easy way to lure a steady stream of buyers, the skeptics said, and the initiative could prove costly to U.S. taxpayers.
But it seems Mnuchin has different ideas. Since taking office as Treasury Secretary in February, he’s repeatedly indicated that ultra-long issuance was something the administration was looking at. Last month, he had his staff query bond dealers about how they might structure and price maturities beyond the current 30-year limit. And on Monday, Mnuchin provided the clearest signal yet, saying on Bloomberg TV that it “could absolutely make sense.”