| Treasuries spreads 10-year versus 30-year |
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The US government should reinstate new issuance of the 30-year bond, and sell up to $20 billion by year end. So says Mustafa Chowdhury, head of US rates strategy for Deutsche Bank. "If they weren't to start until the third or fourth quarter this year, $10 billion would be a decent number," he says. Chowdhury is not alone in wanting to see a return of the 30-year bond, issuance of which was suspended in 2001. Strategists and economists across the US have been arguing in favour of it recently, and whether and when the government might return to the 30-year is a standard question whenever administration officials appear at Bond Market Association events. Joshua Bolten, head of the Office of Management and Budget, was most recently on the receiving end at such an event in February. He sidestepped it, stating it wasn't his department.
Some have pointed to Europe as showing the way. There has been a rush to issue long-dated bonds in recent months, culminating in a 50-year euro deal from France and even a 50-year corporate deal from Telecom Italia.