NEW YORK (MarketWatch) -- The notion that the Treasury Department could issue a 50-year bond surfaced in the bond market Tuesday, a day before the government announces its weekly borrowing plans.
David Ader, head of government bond strategy at RBS Greenwich Capital, and two other analysts said speculation that the Treasury would announce plans to sell 50-year bonds - which would be the longest maturity ever issued by the U.S. - bounced around in trading circles Tuesday.
But Ader says he doesn't think Treasury will make such a move. Andrew Brenner, a trader at MF Global, and Roseanne Briggen, an analyst at Informa Global Markets, also downplayed the likelihood of such a sale.
"I don't feel it's necessary at this stage," Ader said. His firm is one of the 16 primary U.S. government security dealers that are required to bid at auctions.
On Wednesday, Treasury will say how much in debt the U.S. plans to issue next week and any further changes to its debt issuance calendar.
A spokesman for the Treasury Department was unavailable to comment, though as a policy declines comment on changes to debt issuance except after announcing plans.
A group of investment funds and banks that advise Treasury on its issuance plans said after last quarter's meeting that they had considered 50-year bonds but opted not to recommend that option.
The government has resumed selling 3-year
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1.35, -0.01, -0.9%) and 7-year notes in recent months to help spread out its increasing financing needs.
Instead of 50-year bonds, Treasury may prefer to sell 30-year bonds more often, said Ader.
Thirty-year bond yields
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3.96, +0.13, +3.3%) rose 13 basis points to 3.97%.
