The U.S. Treasury has scrapped the 30-year bond, thrusting 10-year bonds into the limelight as they key long-term bond. Peter Fisher, Under Secretary of the Treasury for Domestic Finance, made the announcement today in his quarterly remarks.

Treasury is suspending issuance of the 30-year bond, meaning there will be no auction of 30-year securities in February 2002. The American government has no plan for further auctions of either 30-year nominal or inflation-adjusted bonds.

“We do not need the 30-year bond to meet the government’s current financing needs, nor those that we expect to face in coming years. Looking beyond the next few years, as I already observed, we believe that the likely outcome is that the federal government’s fiscal position will improve after the temporary setback that we are now experiencing.”

Fisher noted that the 30-year bond no longer maintains a position of significance in the financial markets. “Its role and its liquidity have been significantly impaired by the substantial reduction of issuance that has occurred over the last decade. But the markets have functioned smoothly during this period while both activity and attention have shifted to our 10-year offerings.”