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system
is it normal that us treasury bills(0.07%) yield smaller than interest rate(0.25%)?
user
im not sure if its normal/sensical/healthy, and that is kind of opinion based. but there is a reason for it. certain rules and regulations passed recently are causing companies or institutions to shift to bonds from cash. fidelity, for example, is completely converting its $100 billion dollar cash fund to short term bills. its estimated that over $2 trillion that is now in cash may be converted to bills, and that will obviously put upward preasure on the price of them. the treasury is trying to issue more short term debt to balance out the demand. read more here: http://www.wsj.com/articles/money-funds-clamor-for-short-term-treasurys-1445300813
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