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The US government is bringing back a bond it hasn't issued since 1986 as America's deficit continues to balloon.

After looking at a range of long-dated options, the US Treasury has announced that it will issue a new 20-year bond in the first half of 2020. The decision follows a feedback period, during which the Treasury also considered 50-year and 100-year bonds.

"We seek to finance the government at the least possible cost to taxpayers over time, and we will continue to evaluate other potential new products to meet that goal," Treasury Secretary Steven Mnuchin said in a statement on Thursday evening, the timing of which took investors by surprise.

Why it's happening: While the US Treasury is well-funded through fiscal year 2020, next year "becomes a bit more challenging," Mark Cabana, head of US interest rates strategy at Bank of America, told me.