WASHINGTON-- The White House is considering issuing long-term bonds to finance a proposed 1.3-trillion-USD fiscal stimulus package in response to the coronavirus outbreak, according to local media.
U.S. President Donald Trump's advisers are considering issuing both 50-year and 25-year bonds as they seek financing for additional federal debt with the lowest cost to taxpayers, Bloomberg reported on Thursday, citing people familiar with the matter.
White House National Economic Council Director Larry Kudlow likes the idea and Treasury Secretary Steven Mnuchin is now more willing to do it, the report said.
In an interview with Fox Business on Thursday, Mnuchin said the administration is going to "take advantage of lower interest rates" to issue more bonds.
"Given our desire to be regular and predictable, we decide that...we could raise a lot more money at 20 year bonds and that would extend our duration," he said.
"The good news is, we can refinance a lot of our debt at low levels and we have no problem issuing more debt here," said the Treasury secretary, while urging Congress to pass the proposed stimulus package.
"The most important issue is we now get this $1 trillion package passed so we get money into the economy, and I think you'll see when hardworking Americans and business have access to credit, you're going to see a stabilization in this economy," he said.
The latest move came after the Federal Reserve on Sunday cut its benchmark interest rate by a full percentage point to near zero and pledged to increase its bond holdings by at least 700 billion dollars amid mounting fears over the coronavirus outbreak.