Wall Street dealers say the Treasury appears very likely to bring back the 30-year bond, according to an informal poll conducted by BW. "They're just floating a balloon so the markets can adjust to it. I can't imagine they won't [bring the 30-year back]," said Tom Tucci, executive director of fixed income at Mizuho Securities.
The Treasury said in its quarterly refunding statement last week it was considering reintroducing the 30-year bond and will announce at the next quarterly statement if it decides to hold semi-annual auctions starting in February. This contrasts with the party line from just a few short weeks ago, when Treasury Secretary John Snow seemed to put the kibosh on the 30-year's resurrection by saying at the recent The Bond Market Association meeting he did not see the need to bring the long bond back (BW, 4/25).
But based on last week's announcement, the consensus is the 30-year will return. "They were very specific about when and how often they would issue [the long bond]," said Adam Brown, co-head of Treasury trading at Barclays Capital.
