Treasury sets long bond's return for Feb. 9

The Chicago Tribune reports:

The new 30-year bond will debut in February, helping the U.S. Treasury raise an estimated record $171 billion during the first quarter of 2006, the government announced Wednesday.

The Treasury Department said the first 30-year bonds will be auctioned Feb. 9 and the total amount of bonds that will be sold will be announced Feb. 1. The government had announced in August that it was bringing back the 30-year bond, but it had not specified the date for the first auction.

Officials said then that they expected to raise between $20 billion and $30 billion each year with the bonds auctioned in February and August.

The government began selling a 30-year bond in 1977, but it was discontinued in 2001, which turned out to be the last year that the government produced a budget surplus.

This is also big news for the mortgage market.Higher rates are on the way.