Yellen: No Plans to Lengthen Treasury Bond Maturities

The United States government does not plan to prolong the maturity of its debt instruments, said the U.S. Treasury Secretary Janet Yellen.

Last year, the average maturity of Treasury bonds declined as the Trump administration amid an increased dependence on short-term notes.

“Treasury has been looking at this question and has no current plans to do that,” Yellen noted.

“The current issuance profile is actually leading to the average maturity of the debt gradually increasing.”

“The Treasury is already extending the [weighted average maturity] (WAM) of the debt gradually over time under the current issuance profile.”

Moreover, Yellen said that the U.S. economy is still in crisis due to the Coronavirus pandemic.

“Once the economy is strong again President Biden is likely to propose that we engage in long-term plans to address longstanding investment shortfalls in infrastructure, investment to address climate risk, investments in people, [research and development] (R&D), and manufacturing.”

Speaking in a virtual hearing by members of the House of Representatives, Yellen reiterated her belief that the $1.9 trillion relief bill was necessary to help the economy bounce back from the pandemic’s negative impacts, expecting it will help recovery.

“I am confident that people will reach the other side of this pandemic with the foundations of their lives intact.”

“I believe they will be met there by a growing economy. In fact, I think we may see a return to full employment next year.”

Yellen even said that full unemployment could be restored in 2022.

Yellen, alongside the Chairman of the Federal Reserve, was testifying before the House Financial Services Committee, as part of Congressional Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response.