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Loooong Bonds



February 04, 2011 – Comments (4)

The latest Treasury Borrowing Advisory Committee meeting included discussion of issuing ultra-long bonds with maturities from 40 years to as long as 100 years.  100 year bonds?  Turns out these ultra-long issues exist in the corporate and municipal market and now some advisors are recommending the US Treasury start issuing them.

It isn't likely to happen anytime soon, but Treasury is already pushing average maturities farther out the curve.  Combine that with a couple of big name ultra-long issues last year and I think some smart money folks are telling us interest rates are headed higher.

What's your opinion? Are rates done climbing or are they headed higher?

Fool on!



4 Comments – Post Your Own

#1) On February 04, 2011 at 6:49 PM, truthisntstupid (90.72) wrote:

If we can get the Chinese to buy our 200-year zero-coupon bonds it'll kick the can way down the road!

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#2) On February 05, 2011 at 12:11 AM, Valyooo (35.51) wrote:

I hope I can get my hands on these long term bonds.  If inflation gets outta hand and interest rates ever hit 15% on a long term bond, I would sell my soul and use it to buy these.

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#3) On February 05, 2011 at 11:26 AM, rofgile (99.54) wrote:

If Mexico can sell 100-year bonds, the United States should have no problem.



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#4) On February 05, 2011 at 7:16 PM, tekennedy (93.21) wrote:

I think this is a smart idea as it will delay inflation for a long time.  You're probably right in your analysis of higher interest rates sometime in the near future (especially compared to 100 years).  I second Valyoo's comment, thatd be nice to lock in.

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