Trump’s 50-Year Mortgage Play, Part II: Other Plans At Work?
By Erik Sherman, Senior Contributor
Chris Hodge shares insight as to whether a 50-year mortgage makes sense to most people.
But others think the pressure for matching 50-year-dated Treasury instruments would be strong. “From a market standpoint, creating a 50-year mortgage market would require matching long-dated instruments to hedge duration risk,” says Chris Hodge, economist at Natixis CIB Americas. “That could, in theory, spur the Treasury to issue 50-year bonds — something periodically discussed but never implemented. But I’m skeptical the market could absorb that kind of duration risk. There’s limited natural demand for ultra-long assets in the U.S., and without deep, consistent investor appetite — think insurers, pensions, or foreign reserve managers — yields would need to rise sharply to attract buyers.”