October 13, 2026
Discussion is renewed on Wall Street about the possibility of canceling 20-year US Treasury bonds, as a possible step to reduce government borrowing costs, amid escalating debt service burdens and rising long-term bond yields to levels not seen in more than two decades.
According to what Bloomberg News reported, this controversy coincides with exactly 25 years since the sudden decision taken by the US Treasury Department in October 2001 to stop issuing 30-year bonds, a decision that faced widespread criticism from market participants at the time, before the ministry backed down and resumed issuance.
In this context, the report quoted George Saravilos, a strategist at Deutsche Bank, as confirming that during a recent visit to clients in New York he observed indicators indicating the possibility of suspending the issuance of 20-year bonds. In parallel, analysts at Citigroup recommended that investors prepare for the possibility of ten-year bonds outperforming twenty-year bonds, in light of the possibilities of reducing or completely canceling the latter.
The main motivation behind this trend is the efforts to reduce the cost of financing the US government, inspired by the precedent of stopping the issuance of thirty-year bonds in 2001. It is noteworthy that former Treasury Secretary Steven Mnuchin, who had revived twenty-year bonds in 2020, called in 2024 for their cancellation, indicating in statements to “Bloomberg” that they “cost taxpayers too much.”
Since proving its presence again in the market, 20-year bonds have been characterized by higher yields compared to their 10-year and 30-year counterparts, which has made borrowing operations through them more expensive for the state treasury, a problem that is exacerbated by the escalation of interest expenses on government debt coinciding with yields reaching record levels that the markets have not seen for decades.
Investors’ attention is turning towards November 4, the date of the Treasury’s quarterly plan for borrowing and issuing debt, to await whether Treasury Secretary Scott Besent will decide to cancel the 20-year bonds, despite the absence of any clear preparatory steps for the decision so far.
In response to this, Padraic Garvey, head of research for the Americas at ING, explained that canceling these bonds may represent a direct option to reduce costs, adding that his organization’s expected basic scenario remains maintaining the current situation without change.
