6 ms·

> This problem exists because the short term risk free rate is too high (which is turn is because government debt is too high). This doesn't make sense. If gov

by ac29 4y ago

> This problem exists because the short term risk free rate is too high (which is turn is because government debt is too high). This doesn't make sense. If government debt is too high, they should want the interest rates to be low, not high.

bradleyjg 4y ago
The more debt you have to sell the higher the interest rate you need to offer to clear the market.
- chii 4y ago
  only if there's not enough buyers for the debt you want to sell. For the US gov't, it doesnt seem like it.
  - bradleyjg 4y ago
    What’s your explanation for why the 26 week T bill is 4.56% rather than say 2% or 1%? The government just felt like paying more?