Mnuchin says 100-year treasury bonds are possible

WASHINGTON (Reuters) – US Treasury Secretary Steven Mnuchin said on Thursday that the United States would issue bonds at age 50 if there was "appropriate demand", a decision to "clear up" the 22 trillion dollars of government debt and keep rates low.

"We will start with 50 years, and if the answer is good, 50 years will be successful, we will consider 100-year bonds," said Mnuchin in an interview with The New York Times DealBook, broadcast live, adding that he began to study the possibility of very long obligations in the United States two years ago.

The oldest US Treasury is currently 30 years old.

US President Donald Trump has proposed a different solution to the rising cost of US record debt, calling on the government Wednesday to ask the Federal Reserve to bring interest rates below zero to reduce payments interest.

The Fed is generally expected to cut interest rates by a modest quarter of a point next week at the US policymakers meeting.

Fed Chairman Jerome Powell and other policymakers say US economic conditions remain broadly favorable, despite a global slowdown and a still unresolved trade war, and have consistently pushed back the notion of negative rates or pressure fixing.

On Thursday, the European Central Bank pushed its key rates further into negative territory to try to stimulate growth, prompting a Trump complaint that Europeans are "paid" to borrow money, while the Fed " rest, rest and rest ".

When asked about negative interest rates, Mnuchin said he was not a fan of his boss.

"Low interest rates are good for economic growth," said Mnuchin. "I think that negative interest rates do not tell if they are good for economic growth. I think negative interest rates are bad for banking. It is difficult to develop an economy without having a healthy banking business. "

Mnuchin had predicted, however, that the ECB's easing policy could bring more global capital into US Treasury bonds, whose yields, while historically low, are well above those of US bonds. 39, German state.

"My expectation is that you will see a big flow of funds" in 10-year treasury bills, said Mnuchin. This would push up US bond prices and lower yields, which would give additional impetus to the idea of ​​issuing ultra-long bonds in the US to block low borrowing costs.