Treasury Advisory Committee Declines to Endorse Mnuchin's Idea for 50-, 100-Year U.S. Bonds

By Josh ZumbrunFeaturesDow Jones Newswires

A key advisory committee at the Treasury Department has advised that Treasury Secretary Steve Mnuchin's idea to create 50-year and 100-year U.S. bonds is unlikely to be successful.

The Treasury's Borrowing Advisory Committee, composed of representatives from some of the largest financial institutions that participate heavily in the bond market, told the Treasury that "the committee does not see evidence of strong or sustainable demand for maturities beyond 30-years."

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The committee meets quarterly, in advance of the Treasury's quarterly refunding statement, when it announces its plans for financing the U.S. debt. Currently, the U.S. Treasury issues no debt longer than 30 years. Mr. Mnuchin has argued that ultra-long bonds could be a useful tool for locking in today's low borrowing costs for a very long time. Last month, the Treasury requested the advisory committee analyze the viability of bonds longer than 30 years.

The Treasury said that it would continue to study longer-term debt, and provide an update at a future quarterly refunding.

Write to Josh Zumbrun at josh.zumbrun@wsj.com

(END) Dow Jones Newswires

May 03, 2017 08:53 ET (12:53 GMT)