The Treasury Department is detailing how it plans to borrow a record-breaking USD 2.99 trillion in debt this quarter which will include issuing for the first time since 1986 a 20-year bond.
The Treasury faces an unprecedented need for credit because of the trillions of dollars the government is spending to deal with the impact of the coronavirus pandemic, which has resulted in the loss of millions of jobs.
And the nation is likely headed for a deep recession.
Treasury officials said Wednesday that the 20-year bond will be auctioned on May 20 with the goal of raising USD 20 billion. That will be followed by USD 17 billion auctions in June and July.
Senior officials believe the Treasury market will be able to handle the big increase in the government's borrowing needs. Those Treasury officials say they have already raised USD 1.5 trillion of the USD 2.99 trillion in increased debt in April.
The Treasury announced Monday that it planned to borrow USD 2.99 trillion in the April-June quarter, more than five times the previous quarterly borrowing record of USD 569 billion set at the height of the financial crisis a decade ago.
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In addition to the 20-year bond auctioned on May 20, Treasury said it would hold a series of auctions next week, starting on Monday, to raise USD 96 billion by selling three-year and 10-year notes and a 30-year bond.
The USD 2.99 trillion in borrowing for just this quarter exceeds the USD 1.28 trillion the government borrowed in the bond market all of last year.
The huge sum is needed to pay for nearly USD 3 trillion in rescue aid that the government has unleashed in programs to support tens of millions of people now jobless, as well as shuttered businesses, with direct payments and loans.
In addition, the government needs to borrow to cover the shortfall in revenue that will occur because the Trump administration has delayed the deadline for tax payments this year from April to June.