New study shows swapping Treasury debt could lower long-term interest rates.
The article explores different ways to manage money when interest rates are stuck at zero. By looking at how the government's debt maturity affects interest rates, the researchers found that changing the mix of short and long-term debt could impact rates. They suggest that selling short-term debt and buying long-term debt could lower long-term rates by 14 basis points. This strategy could be as effective as buying $400 billion in long-term debt outright.