Home / Investing / Mnuchin will increase the average maturity of the debt; Ultra Long Bonds on Ice – Investment Watch

Mnuchin will increase the average maturity of the debt; Ultra Long Bonds on Ice – Investment Watch

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by confused interest

The United States Congress will never stop giving money in the form of rights promises, etc. Just look at USDebtClock.org if you don't believe me.


Screenshot 2020-01-24 at 10.14.26 AM

Of course, trying to get politicians to act wisely is out of the question. Therefore, the United States Treasury has to reduce the cost of debt financing. And offer more debt instruments, such as a 20-year guarantee.

(Bloomberg) – US Treasury Secretary Steven Mnuchin said the country's new 20-year guarantee will extend the average maturity of government debt while adding that long-term bonds will not arrive soon. The Treasury yield curve flattened further after its comments.

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<p><em><strong>The issuance of ultra-long bonds, which expire in more than 30 years, "is no longer in the short term: our focus for the moment is to issue 20 years."</strong>Mnuchin said in an interview in Davos, Switzerland, where he will attend the World Economic Forum (along with climate teenager Greta Thunberg).</em></p>
<p><em>Last week, the Treasury Department announced that it will begin issuing 20-year bonds in the first half of 2020, expanding its list of securities as the government looks for ways to finance a budget deficit that will reach $ 1 billion this year.</em></p>
<p><em>"If you look at the amount of 20-year bonds we will collect, this will extend slightly," the average maturity, he said, and declined to predict how much. "This is not going to be a massive extension."</em></p>
<p><em>The lengthening of the average maturity allows the government to distribute the risk over a longer period and set the borrowing costs at the current low level. <strong>The average maturity of the outstanding debt of the Treasury is around 70 months, compared to the average since 1980 of approximately 60 months. It reached a maximum of 70.7 months in mid-2017.</strong></em></p>
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