FundRobot » Bond Funds » Short-term Treasury interest rates have been close to zero for some time.?

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Default short-term treasury interest rates have been close to zero for some time.

What does this indicate about the time value in liquid assets?


Please help! I'm taking a finance class.

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Default short-term treasury interest rates have been close to zero for some time.

Very little. Today's ultra low interest rates are the result of Federal Reserve Board policies. They do not reflect a valuation attained through the interaction of private sector market forces. The time value of money that private sector creditors would assign to their capital would be higher than current market rates. That can be evidenced by the flow of funds into high yield bonds, which suggests that private sector investors don't accept current Treasury rates as an adequate return for their capital.
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