Bond Outlook February 8th

The return of the 30 year T-Bond symbolises the complete turnaround, since 2000, of US Federal financing. Remember the boastfulness of the Clinton Administration when it declared that the country had a healthy and growing Federal budget surplus, and that it no longer needed long bonds, rejecting the market’s plea to keep issuing at that maturity. For the last five years government financing has been far cheaper at 2, 5 and 7 years than even at 10, never mind 30.