Mnuchin’s Bond Advisers Poised to Give Ultra-Longs Thumbs Down

The elite bond market group that advises Treasury Secretary Steven Mnuchin on how best to manage America’s finances is likely to caution against his idea of reviving a plan to sell bonds maturing in 50 or 100 years.

Mnuchin told Bloomberg News Wednesday that adding to the Treasury’s arsenal of debt beyond the current maximum of 30 years was “under very serious consideration.” The idea was turned down in the past by the Treasury Borrowing Advisory Committee, the body that helps guide him, and their views on the matter haven’t changed since then, according to people familiar with their current and past thinking. The committee is likely to double down on past counsel that such sales wouldn’t be sustainable in a consistent fashion over the long term when Treasury debt managers gather next in October, the people said.

“The views TBAC presented in May 2017 regarding the debatable benefits of the U.S. selling 50- or 100-year remain true today because it emphasizes Treasury’s goal to have issuance be regular and predictable over time,” said Jason Cummins, who was TBAC chair in 2017 and is now chief U.S. economist at hedge fund Brevan Howard Asset Management.

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