Treasury Plans to Expand Debt Buyback

Flush with cash from years of economic expansion, the United States announced plans for a bigger-than-expected buyback of as much as $30 billion of debt this year. Treasury Secretary Lawrence Summers said the buybacks will reduce interest payments for the government over the longer term, leading to benefits for consumers in the form of cheaper mortgages and business loans. Some older U.S. Treasury securities carry interest rates of 13% or more. Summers said the department is issuing final rules authorizing buybacks but said that many details must still be worked out, including how to notify investors. He suggested that longer-term issues would be targeted, but did not specify any maturities. There are about $3.3 trillion in publicly traded U.S. Treasury bonds, notes and bills outstanding in maturities ranging from three months to 30 years.