The article explores how monetary policy can be optimized when government debt is actively managed. When the economy is not at its lowest point, monetary policy struggles to fully counteract interest rate shocks, leading to reduced welfare. However, during economic downturns, higher inflation expectations can help stabilize government debt by lowering real interest rates. If government debt is long-term, the benefits of improved performance during economic lows may outweigh the drawbacks during normal times compared to when fiscal policy is passive.