“Back when we had surpluses, that’s when it [the 30-year bond] was ended. Now we’ve swung to substantial deficits," he added. "Plus we have a substantial stimulus programme. And even before all that, post-2010, everyone agreed we were going to have large deficits again, because of the baby boomers now collecting social security.”
The CBOT introduced its 30-year Treasury bond future in 1977, when the US treasury was primarily issuing 30-year debt. The contract subsequently became the exchange's most highly traded contract. Today, however, the 10-year contract is the benchmark.
Neubauer said he was happy with Bush’s plan to stimulate the US economy. “I think the fact that the stimulus programme has edged up from $200 billion to $674 billion does make it a major factor in how we look at deficits over the coming years… that creates interest in our markets, and volatility.”