U.S. Markets

Treasury chief says U.S. seriously considering ultra-long bonds: Bloomberg

U.S. Treasury Secretary Steven Mnuchin walks to a working breakfast at the G7 Summit in Biarritz, France, August 25, 2019. Erin Schaff/Pool via REUTERS

WASHINGTON (Reuters) - Treasury Secretary Steven Mnuchin said on Wednesday the possibility of issuing ultra-long U.S. bonds is “under very serious consideration” by the Trump administration, Bloomberg News reported.

“If the conditions are right, then I would anticipate we’ll take advantage of long-term borrowing and execute on that,” Mnuchin told Bloomberg in an interview.

Mnuchin said his renewed interest in 50- or 100-year bonds was unrelated to the drop in yields on shorter-term U.S. debt, Bloomberg reported.

Currently, the 30-year bond is the longest-dated U.S. Treasury bond.

Earlier this month, the Treasury Department asked for feedback from market participants about the possibility of selling ultra-long bonds. The department posed a similar inquiry in 2017.

U.S. Treasury debt yields fell on Wednesday, with 30-year yields setting all-time lows, as fears about a recession and U.S.-China trade tensions stoked unrelenting demand for low-risk government debt.

Inversion is spreading across the U.S. yield curve, where short-dated yields are running above long-dated ones, which has also unsettled investors as yield curve inversion often precedes a recession.

Reporting by Tim Ahmann; Editing by Eric Beech and Peter Cooney