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Mnuchin says he's comfortable spending $3 trillion because Treasury can lock in very low rates

Treasury rates

EDITOR NOTES: Treasury Secretary Steven Mnuchin said the administration is unfazed with the historic levels of government spending thanks to the nation’s very low interest rates. “We’re going to take advantage of refinancing all of our debt,” he told CNBC and later noted that the Treasury would stop short of an actual refinancing where it bought back existing debt

Treasury Secretary Steven Mnuchin said Monday that the administration is comfortable with the federal government’s historic $3 trillion in spending to combat the impact of the coronavirus thanks to the nation’s very low interest rates.

“One of the reasons I do feel comfortable with us spending all this money is because interest rates are very low. And we’re taking advantage of long-term rates,” he told CNBC’s Jim Cramer. “Between 10-years, 20-years, and 30-years, we’re borrowing an awful lot of money long term so that we can lock in this $3 trillion dollar for a very, very long period of time.”

Mnuchin said the Treasury would stop short of an actual refinancing where it bought back existing debt. He said the White House wants to seize the opportunity afforded by low interest rates in a sort-of “refinancing” without repurchasing existing Treasury notes from the marketplace.

“We obviously don’t want to disturb the markets too much, but we’re going to take advantage of refinancing all of our debt to make sure that we have very low rates. I think that’s something that’s a great opportunity for us,” he said. “I don’t think we need to buy back debt ... I think we have tremendous opportunities without having to buy back debt.”

The Treasury secretary’s comments came on the heels of historic government spending and emergency funding to help U.S. businesses cope with the fallout from the coronavirus pandemic. 

Originally posted on CNBC.com

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