NATIONAL DEBT/TREASURY: “The Treasury Department has unveiled a new strategy for managing federal debt that could ease pressures set to push up long-term interest rates and reduce a potential drag on the economy.
Under the plan unveiled earlier this month by Treasury, the department would increase the share of shorter-term debt issuance and reduce the share of longer debt issuance, ending a yearslong trend that favored long-term debt issuance.
Total issuance of government debt will still rise in coming years with growing federal budget deficits. As that supply increases, it is likely to weigh on bond prices, pushing up yields, which rise as prices fall. And Treasury yields influence other household and business borrowing costs throughout the economy, such as on mortgages and corporate bonds.
The Treasury’s new approach will shift some of that upward pressure on yields to shorter-term debt and away from longer-term debt.”
-Nick Timiraos, “Treasury’s New Approach to Debt: Go Short,” The Wall Street Journal online, Nov. 16, 2017 05:30am