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Mon 10 Oct 2009US loan costs plan may mean further bond losses
US TREASURY secretary Timothy Geithner’s plans to lock in near record-low borrowing costs in 2010 may mean a second year of losses on longer-term bonds.
After selling $1.9 trillion (€1.26 trillion) of short-term securities to finance President Barack Obama’s efforts to end the worst recession since the 1930s, the Treasury plans to lengthen the average due date of its outstanding debt to 72 months from a 26-year low of 49 months. That may mean boosting sales of 10- and 30-year bonds by 40 per cent over the next year to $600 billion.
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