Why Treasury Secretary Janet Yellen issued short and intermediate-term Treasury securities (Bills and Notes) rather than Bonds when the Fed Funds Rate was at zero percent we will never know. We are now paying the price as the Public Debt rolls over at higher rates. See table below.
Treasury Bills: T-Bills can have a maturity ranging from a few days up to 52 weeks. Therefore, $3.6 Trillion of outstanding T-Bills will need to be rolled over at higher rates than the present average rate of 2.45%. Higher interest rates equal higher interest expense which means the fiscal deficit will likely expand as interest expense balloons. The Fed of course will print money at year-end to offset the deficit (and further devalue the Dollar). T-Bills accounted for 12% of the Public Debt outstanding as of Sept. 30th 2022.
Treasury Notes: Treasury Notes accounted for 44% of Public Debt outstanding as of Sept. 30th 2022 ($13.7 Trillion of $30.9 Trillion Total Public Debt), and carried an average interest rate of 1.59%. This is the largest tranche of Treasury securities and will reset at higher rates as each of the underlying Treasury securities mature. Treasury sells Notes in 2, 3, 5, 7 and 10 year maturities. This will be a painful reset.