Why is the U.S. Treasury not in a hurry to issue long-term bonds? A major European bank provided the answer.

Question

The interest rate team of a certain European bank recently made an interesting judgment - the U.S. Treasury may continue to drag its feet and is in no hurry to test the market's appetite for long-term government bonds.

Their logic is as follows: In 2026, it is highly likely that short-term bonds will still be the main focus, while long-term bond supply will remain stable. After all, the deficit is there, and tariff revenues are unstable, making short-term financing more flexible. Moreover, the Federal Reserve's reinvestment and reserve operations can help absorb short-term bonds—although fluctuations in short-term interest rates remain a troublesome issue.

In simple terms, the Ministry of Finance is not short of money and is not in a hurry; it can completely wait for market sentiment to improve and for policy direction to become clearer before discussing long-term bonds. This “short-term support for long-term” strategy is unlikely to change in the short term.

AirdropSkeptic · Accepted Answer

Playing tricks with short-term bonds, or just being timid? Instead of waiting for sentiment to improve, it’s better to face long-term bond pressure head-on.

MEV_Whisperer · Answer

Short-term debt extension trick, this scheme is back again

JustAnotherWallet · Answer

Short-term debt prolongs life, while long-term debt waits for the wind to come. The Ministry of Finance&#39;s trap operation is indeed well understood.

MissedAirdropBro · Answer

Well, this operation is just about dragging it out. Short-term debt can recover quickly, but for long-term debt, we have to wait for the right conditions to talk.

EntryPositionAnalyst · Answer

It&#39;s just about defaulting on debts, anyway, short-term debts are flexible, just play around for now, and when the situation improves, we can talk about long-term debts.

MoodFollowsPrice · Answer

The short bond play is like this; you have to wait for the right moment. Once the policy situation gets chaotic, everyone plays short, as it&#39;s flexible anyway.

SlowLearnerWang · Answer

It&#39;s the same old trick, extending short-term debt to survive... To put it plainly, the deficit pressure is just too great, and the long-term debt burden is too heavy. Wait, isn&#39;t this the logic of us retail investors being played for suckers? First, we use flexible plans to drag it out, and then we’ll see how it goes. The U.S. Treasury is quite adept at this, we&#39;ll have to watch it unfold slowly.

SellLowExpert · Answer

Playing with short-term bonds is just betting on policy sentiment; I&#39;ve seen this trap too many times.

WhaleMistaker · Answer

The short bond strategy is indeed flexible, but can we really wait for better times like this? It feels like we&#39;re betting on a policy shift...

SignatureAnxiety · Answer

Just play around with short bonds, it&#39;s not like it&#39;s the first time.