The U.S. Treasury Department said on Wednesday it will launch a long-planned 20-year bond and increase securities auction sizes across a range of maturities to raise cash to meet record government borrowing needs caused by the novel coronavirus outbreak.
FILE PHOTO: U.S. President Donald Trump speaks about the Paycheck Protection Program loans for small businesses adversely affected by the coronavirus disease outbreak, as U.S. Treasury Secretary Steven Mnuchin practices social distancing during an event in the East Room at the White House in Washington, U.S., April 28, 2020. REUTERS/Carlos Barria/File Photo
“While the initial increases in financing related to the COVID-19 outbreak response were focused on Treasury bills, Treasury expects to begin to shift financing from bills to longer-dated tenors over the coming quarters,” Brian Smith, Treasury’s assistant secretary for federal finance, said in a statement.
In the statement, Treasury said it intends to increase auction sizes across all nominal coupon tenors over the May-to-July period, with the increases larger in the 7-year, 10-year, 20-year and 30-year categories. The largest increase will be on the 10-year note. Congress has appropriated nearly $3 trillion in recent weeks as it seeks to stem the economic harm on businesses and households from widespread business shutdowns implemented to reduce the spread of the coronavirus.
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