Treasury Secretary Steven Mnuchin floated the idea of the US Government issuing an “ultra-long” government bond next year should the demand arise.
Mnuchin has been talking for the past 2 years about the possibility of expanding the Treasury’s long-term borrowing capabilities, surpassing the horizon of the 30-year bond. The Treasury Secretary said he anticipated that investors might be drawn even more to buying U.S. bonds following the decision by the European Central Bank to cut rates below zero.
Mnuchin pointed to the challenges facing Europe with negative rates, suggesting it would be harder for banks to make money and could undermine the economy.
"It's very hard for banks to make money in negative interest rates, and if banks can't make money it's hard to have a good economy," said Mnuchin.
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