Treasuries sell-off after Mnuchin says US still exploring ultra-long bonds

Listen to this article

00:00
00:00

The 30-year Treasury bond sold-off after Treasury Secretary Steven Mnuchin said ultra-long bond issuance, beyond the current 30-year threshold, could “absolutely” make sense.

The US Treasury has been canvassing opinion on ultra-long issuance from the primary dealers that underwrite the US government’s debt. The 30-year bond rose 5 basis points to over 3 per cent off the back of the comments.

‘‘We think that it’s something that could absolutely make sense for us at Treasury,” Mr Mnuchin said on Monday in an interview with Bloomberg at the Milken conference in Los Angeles.

The idea has been explored before by the US Treasury but has never come to fruition. The topic is also likely to feature as part of this week’s meeting of the Treasury Borrowing Advisory Committee – an industry group that advises the Treasury on its debt issuance.

Traders and analysts have said that even if the Treasury decides to go forward with the plans, it will likely be slow to implement.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.