how does inflation affect treasury bills 
treasurys also have to compete with inflation which is the pace of rising prices even if t bills are the most liquid and safest debt security in the market fewer investors tend to buy them when the inflation rate is higher than the t bill s returns if an investor buys a t bill with a 2 yield while inflation is at 3 the investor would have a net loss on the investment when measured in real terms as a result t bill prices tend to fall during inflationary periods as investors sell them and opt for higher yielding investments 9