Treasury Secretary Steven Mnuchin said on Monday he sees no need for the country to buy back debt and that he plans to borrow money long-term to lock in low interest rates, as the coronavirus pandemic rocks the economy, Reuters reported.
“One of the reasons I do feel comfortable with us spending all this money is because interest rates are very low. And we’re taking advantage of long-term rates,” Mnuchin said in a CNBC interview, adding that the United States plans to refinance all its debt to lock in low rates.
“Because of the amount of debt we have in short-term that does roll off and the amount of debt we’re using for these deficits, I think we have tremendous opportunities without needing to buy back debt,” Mnuchin said.
The Treasury last week announced a record-busting plan to borrow $3 trillion during the April-June quarter to fund coronavirus economic rescue programs and cover a massive drop in revenues. It launched a new 20-year bond to extend maturities.
Mnuchin told CNBC the Treasury had looked at longer maturities but found that demand for the 20-year bond was stronger.
The Treasury chief said it was unclear whether May unemployment numbers could be worse than the 14.7% recorded in April, but struck an optimistic tone about businesses reopening over the summer.
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