The U.S. government is now considering selling debt that would stretch out for 40 years, 50 years – or even 100 years, according to minutes from last week's regular Treasury meeting. With interest rates so low, there's a growing belief that the government could benefit from locking in today's borrowing costs by pushing trillions in debt obligations decades into the future.
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On Monday, a member of the Treasury Borrowing Advisory Committee raised the issue at a regular quarterly meeting with officials from the US Treasury and Federal Reserve Bank of New York... The group consists of 13 senior executives from Goldman Sachs, JPMorgan Chase, Morgan Stanley, RBS Securities, Bank of America and investment firms active in Treasury trading, including Soros Fund Management, Moore Capital and Tudor Investment Corp.
The TBAC member, who was not identified in minutes of the meeting published on Wednesday, recommended that the Treasury consider ultra-long bond issuance, defined as securities issued with a tenure of 40, 50 or 100 years... Investors would welcome the sale of such ultra-long debt as it would satisfy the long-term investment needs of banks, pension funds, insurers and retail investors.
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