Bonds & Rates
Home›Bonds & Rates›Central Banks›BNP warns eliminating the 20-year Treasury could push…
BNP warns eliminating the 20-year Treasury could push yields higher
BNP strategists said cutting 20-year issuance could be seen as panic, potentially encouraging higher yields and lower liquidity.
BNP Paribas SA warned that Treasury Secretary Scott Bessent should resist calls to ax the 20-year bond, saying the move could send US borrowing costs higher.
In a note to clients, bond strategists said market speculation centers on whether Bessent could tilt issuance away from long maturity debt, where yields are near multi decade highs, and toward shorter dated Treasuries.
BNP said reducing or eliminating 20-year issuance, which it described as a radical option, is unlikely to lower yields sustainably and could create unintended consequences, including higher yields and lower liquidity.
The bank also said eliminating the 20-year could be viewed as panic and a sign of the Treasury’s toolkit running out, and it maintained a view that shorting 30-year Treasuries could target a yield rise to 5.8% from 5.64% currently.