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Treasury Yields Jump After Report White House Mulling 50Y Bond To Fund $1.3TN Stimulus

Courtesy of ZeroHedge View original post here.

Amid relentless calls for a massive fiscal stimulus, the market apparently forgot that the stimulus will have to be funded somehow, and that moment came moments ago when Bloomberg reported that the White House is revisiting an idea to issue ultra-long bonds, including 50-year and 25-year bonds, as the source of funding. 

According to the report Trump advisors are trying to come up with the lowest cost option to taxpayers, and that reportedly include the same ultra-long bonds which Mnuchin just two months ago said there was not market interest for.

Bloomberg notes that Trump’s top economic adviser Larry Kudlow liked the idea, and although Treasury Secretary Steven Mnuchin was initially skeptical he has since warmed to it.

As a reminder, Mnuchin in January announced plans to issue a 20-year bond in the first half of the year in an effort to lengthen the average maturity of the agency’s offerings, although he nixed speculation that a 50 or even 100-year bond may come as there was no market interest.

Mnuchin has twice considered issuing 50- or 100-year bonds. Investors have pushed back at the idea because, in their view, ultra-long bonds could not be issued in a consistent and sustainable manner.

It appears that the US will have to push back on investor push back, as that $1.3 trillion stimulus will not fund itself.

The news sent yields on 10Y and 30Y Treasuries sharply higher although the move has since reversed…

… as the market digests the report, although now that US debt is assured to hit $30 trillion in the next 2-3 years, the surge in yields is only a matter of time as fanatic socialist supporters of MMT realize that there is no such things as a free lunch especially when the entire world is suffering from a funding crisis.


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