Markets

US Treasury says it is gearing up to issue a 50-year bond

Key Points
  • The Treasury is "exploring" potential additions to the current suite of Treasury securities, including a 20-year nominal coupon bond and a 50-year nominal coupon bond.
  • Treasury Secretary Steven Mnuchin said previously that the government could be launching 50-year bonds as soon as next year.
  • The federal deficit increased 26% to $984 billion in fiscal 2019, the highest in seven years.
The Treasury Department in Washington, D.C.
Adam Jeffery | CNBC

The U.S. may begin issuing 50-year ultra-long government bonds for the first time, the Treasury Department said Wednesday.

The department is "exploring" potential additions to the current suite of Treasury securities, including a 20-year nominal coupon bond, a 50-year nominal coupon bond and a one-year floating-rate note linked to the Secured Overnight Financing Rate, according to the Treasury's quarterly refunding statement released Wednesday.

"Treasury is taking a proactive approach to prepare for prospective future financing needs," the statement said. No timeline was given for the issuance.

VIDEO10:0910:09
How negative interest rates work

Treasury Secretary Steven Mnuchin told CNBC previously that the government could be launching 50-year bonds as soon as next year as Washington looks for cheaper and longer-term ways to finance its burgeoning debt load. The federal deficit increased 26% to $984 billion in fiscal 2019, the highest in seven years.

The longest duration the U.S. government has now is the 30-year bond. More than a dozen other developed nations have issued bonds with a 40-to-100-year maturity, including Canada, Belgium and Ireland.

President Donald Trump said previously that the country should "refinance" its debt load, a suggestion without any modern precedent. The U.S. has $22.5 trillion in debt, $16.7 trillion of which is held by the public.