Why does the US treasury offer 4-week T-bills?

Question

I get why the treasury department issues T-bills and bonds. However, I don’t understand why they offer such short duration securities? What’s their benefit? And, with the current Fed funds rate, how do these short duration securities not cause stress on the national debt?

In: 1

Answer 1

Banks needs places to park money for varying periods of time. Look at how SVB got in trouble by buying long term bonds when its liabilities were short term. If they’d have parked all their money in 4 week t-bills, they’d still be in business.