BNP Paribas Warns Treasury Against Axing 20-Year Bond
BNP Paribas SA warned Treasury Secretary Scott Bessent that eliminating 20-year Treasury bonds could signal panic and increase borrowing costs for the United States.
Strategists at BNP Paribas SA warned Treasury Secretary Scott Bessent against eliminating the 20-year Treasury bond, arguing the move would lower liquidity and increase borrowing costs. The warning comes as bond traders speculate that Bessent may shift U.S. borrowing away from long-maturity bonds toward short-dated debt to combat yields currently near multi-decade highs.
Led by Guneet Dhingra, the BNP Paribas team characterized such interventions as a "band-aid on a gunshot wound," stating that the move could be perceived as panic and encourage "bond vigilantes" unless the government addresses core inflation and deficit issues.
This debate occurs ahead of the United States Department of the Treasury's quarterly refunding statement scheduled for November 4. The tension follows a previous unexpected revamp of the long-maturity Treasury buyback program, referred to as the "Treasury twist."
