Wednesday, August 03, 2005

The Return of the Long Bond, Part 2

As noted here in May, the Treasury Department is bringing back the long bond. Today's announcement confirms that Treasury officials are working on fitting the 30-year bond into its auction calendar, which is awfully crowded these days with all the deficit spending that has to be financed. The NYT reports:
''We believe this is a prudent debt management step that will continue to allow Treasury to finance the government's borrowing needs at the lowest cost over time,'' said Randal Quarles, the department's undersecretary for domestic finance.
The United States stopped selling the ''long'' bond in October 2001, which turned out to be the last year the government produced a budget surplus. After that, though, it has racked up record amounts of red ink, helping to push up the national debt, which now stands at $7.8 trillion.

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