Forever bonds may be back in play for Team Trump after Saudi Arabia trip

Maybe the 50-year bond isn’t so dead. The conventional wisdom is that so-called “forever bonds,” or US Treasuries with a maturity of 50 years or more, isn’t something that Team Trump is considering for lots of reasons. The main one being that the notion of selling such long-term debt could make it less appealing for investors to buy more conventional treasuries such as 10- and 30-year bonds pegged to consumer rates like mortgages — which would shoot up interest rates for average Americans. Ever since dismissing the forever bond in this column a few weeks ago, I’ve been hearing the other side of the story. Lots of talk along the DC-Wall Street corridor centered on the possibility that the 50-year T-bill could be making a comeback because President Trump was once warm to the idea and he has a lot of short-term debt coming due that could muck up his broader economic agenda. More recently, I’ve been hearing that forever bonds could in some way be part of Trump’s negotiations with the Saudis, who have just pledged economic cooperation and investment in the US. I have no solid info that Trump ever broached the idea during his recent sit-down with Saudi leader Mohammed bin Salman, aka MBS. It was a love-fest between the 39-year-old crown prince and the 78-year-old Trump, with no shortage of platitudinous compliments and lots of promises of closer economic ties with the cash-rich kingdom, so who knows what came up. Plus, the Saudis operate one of the world’s largest sovereign-wealth funds, the $900-billion-plus PIF.That’s one reason there’s speculation the Saudis could help the US refinance its debt with the 50-year bond.  Sign up to receive On The Money by Charlie Gasparino in your inbox every Thursday.

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