We haven’t heard much from Steve Mnuchin since the Trump administration ended but the former Treasury Secretary and Hollywood financier is in the news today.
He says that the US should drop the 20-year bond that he introduced. A look at the yield curve today shows why:
- 10 year 3.95%
- 20 year 4.33%
- 30-year 4.24%
That kink in the curve costs US taxpayers money, something that Bloomberg highlights:
Since the Treasury re-introduced the 20-year bond in monthly auctions
four years ago, their sale has tacked on roughly $2 billion a year in
interest expenses on top of what the government would have otherwise
paid, a simple back-of-the-envelope calculation shows. That’s some $40
billion over the life of the bonds.
I would not keep issuing them,” said Mnuchin. “It’s just costly to the taxpayer.”
The Treasury will have some big decisions to make in the years ahead as deficits continue to swell.