4 ms·
Why not go long? People forget that the market is bigger--many times bigger--than the Treasury and the Fed put together. Why not go long? Because the market
by mynameishere 11y ago
Why not go long?
People forget that the market is bigger--many times bigger--than the Treasury and the Fed put together. Why not go long? Because the market for 20+ year debt at a laughable yield won't allow it. I suspect the economists at our governing institutions know what they are doing: Rising rates will cause havoc, and so they sell paper based on avoiding said havoc.
- gwern 11y agoThat would make sense, except reality disagrees: long-term debt is salable. US 30 year debt used to be perfectly liquid, and even more extremely, perpetuities like the British consol have had no troubles being sold or traded. The US government did not switch to short-maturity debt after careful consideration and research proved longer maturities didn't work, it was much more accidental than that...