In an earlier post, I drew attention to my Seeking Alpha article about the possible issuance of floating-rate notes by the U.S. Treasury. I pointed out that while one of the given rationales for floaters would be to lengthen the average maturity of the Treasury’s debt, any such increase in average maturity could give a false signal about the Treasury’s exposure to rising interest rates.
On March 19, the Treasury published a request for public input on the potential sale of floaters. According to the notice,
Treasury is particularly interested in comments concerning the demand for the product, how the security should be structured, its liquidity, and any operational issues that should be considered relating to the issuance of this type of debt.
The Treasury did not specifically request comments about the impact of floaters on its interest rate risk.
See this Reuters article for more on the Treasury’s request for comments.