White House considers 25- and 50-year bond to finance coronavirus fiscal stimulus package: report

Marketwatch ^ | March 19, 2020 | Sunny Oh

[C19fan]

The White House is considering the sale of 25- and 50-year bonds to help finance the fiscal stimulus package aimed at cushioning the economic blow from the COVID-19 outbreak, according to a Bloomberg News report citing sources familiar to the matter. The report briefly sent long-term yields higher, until a sharp surge in initial jobless claims pulled rates lower again. Some investors and analysts have called for the Treasury to issue longer-term debt to take advantage of the current low level of borrowing costs. At the same time, investors say the climb in bond yields this week could complicate the U.S. government's plans to issue a wave of debt to fund the stimulus efforts. The 10-year Treasury note yield TMUBMUSD10Y, 1.140% stood at 1.151%, and the 30-year bond yield TMUBMUSD30Y, 1.821% traded at 1.773%. Bond prices move in the opposite direction of yields.

[C19fan]

Forget about 50 year bond go big...issue never maturing consuls like the British did in the 18th century.

[ProtectOurFreedom]

As long as the maturity is longer than the period between pandemics.

[Sacajaweau]

Everything is on the table...The next two weeks will likely give us some direction.

What I like....Trump ponders and seeks advice...

I do the same when making a decision....especially when it involves my family.

[Zhang Fei]

[At the same time, investors say the climb in bond yields this week could complicate the U.S. government’s plans to issue a wave of debt to fund the stimulus efforts. The 10-year Treasury note yield TMUBMUSD10Y, 1.140% stood at 1.151%, and the 30-year bond yield TMUBMUSD30Y, 1.821% traded at 1.773%. ]

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What a joke. Time was when 30 year bonds were issued with double digit coupons.

https://www.reuters.com/article/us-usa-bonds-10pct/thirty-years-on-treasury-bond-with-10-percent-coupon-bows-out-a-star-idUSKCN0QH19N20150812

[gloryblaze]

It is nice t hear some fiscal discussion as opposed to fantasy money flying out the doors.

[ClearCase_guy]

I did not know about Consols. Interesting concept. Do you know if they are viewed today as having been a smart investment by the people who bought them when they were issued? And are they considered to have been a smart way for the government to fund projects?

My assumption (since they aren’t around anymore) is that investors did pretty well and the government did not. Seems like an annuity but perhaps without sufficient backing, making the issuer liable for expenses. But I’m not sure.

[Reily]

why not perpetuals?

https://en.wikipedia.org/wiki/Perpetual_bond

[NEMDF]

Can’t wait for the leftist MSM stories to come out. They will be skewering POTUS, saying no one should be expected to PAY for the stimulus. It should be “free” from the government.

[Leaning Right]

I would just love to buy a 50-year bond that yields maybe 1 or 2%. What line do I get in to buy this cash cow?

/s

[Socon-Econ]

Stay away from them. With no indexing of interest rates, they’ll be whittled away by inflation. Or they’ll be repudiated by socialist Democrats who have tanked the economy.

[Captain Peter Blood]

Why not 100 year bonds. Britain refinanced a few years ago Bonds issued to pay for W.W. I and the interest rate was pretty good.

[sheehan]

Get a bond to finance the finishing and strengthening of the Wall and it would sell like hotcakes

[ARW]

Precisely.

[SunkenCiv]

30 years will be fine. And finance the whole danged year of fed spending while you're at it, and *really* stimulate us. Yeah, that's it, baby, oh yeah, you're the boss...