Illya Gerasymchuk
Financial & Software Engineer
the US treasury is doing exactly that - issuing short-term debt to retire/repurchased long-term debt
the US treasury is doing exactly that - issuing short-term debt to retire/repurchased long-term debt
that's effectively refinancing longer-term debt with shorter-term debt. this shorter-term debt will also need to be refinanced, but now much sooner
this is why duration matching is key for financial institutions
this is also the reason why it's generally not a good idea for governments to refinance long-term debt with short-term debt
this shortens the duration of both - government liabilities and market's assets