WASHINGTON (Sputnik) – The US Treasury Department will later this month launch a 20-year bond with an initial offering size of $20 billion to help fulfill nearly $3 trillion in financing needs caused by the coronavirus (COVID-19) pandemic, Deputy Assistant Secretary Brian Smith said in a statement on Wednesday.
“Treasury anticipates that the initial offering size of the 20-year bond will be $20 billion and that the auction will take place on Wednesday, May 20, 2020, at 1:00 p.m. EDT,” the statement said. “Treasury’s borrowing needs have increased substantially as a result of the federal government’s response to the COVID-19 outbreak.”
The statement added that since the end of March, Treasury has raised an unprecedented $1.464 trillion on net, resulting in its cash balance reaching historically high levels.
The Treasury said in a statement on Monday that it would borrow nearly $3 trillion this quarter to fund the US economy through the novel coronavirus (COVID-19) pandemic.
The Treasury’s fiscal response comes as the US economy shrank by 4.8 percent in the first three months of 2020, its most in a quarter since the Great Recession of 2008-09, due to the pandemic, which threw tens of millions of Americans out of jobs.
Both White House and private economists say the economy is expected to see even worse performance in the April to June stretch.