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They should not even get to invest in Treasury notes. Greenspan famously only invested in Treasury notes. (Un)surprisingly t-bills did quite well during his t

• whatshisface 7y ago
  That might bias policy in a way that raised T-bill rates above the best value just so Congress could make more money.
  • alkibiades 7y ago
    correct me if i’m wrong but i believe the rates are set by the Fed, which is independent in theory.
  • jquery 7y ago
    T-bill returns shoot way up when interest rates are dropped, because now your T-bill is throwing off more money than a new T-bill. This is how a given T-bill mutual fund might go up 50% YoY. The reverse happens when interest rates rise. Even though the Fed is independent in theory, Congress surely has some influence and perhaps insider knowledge.
  • cryptonector 7y ago
    The inverse. Lower rates -> higher bond value. Bonds work like that. Greenspan held bonds. He worked rates lower. That made the bonds he held more valuable because those were paying higher interest than new bonds. Now mind you, lower interest rates was a very good thing in the 80s. Whether you think lower is better even now, one thing is certain: Greenspan did have a conflict of interest even as he showed how much he didn't.