See a lot of pieces today about government bond maturity lengths. Two things we should all recognize:

1. Over the last decade, federal and provincial governments have been issuing more long-duration debt and less short-duration

2. This bet turned out staggeringly badly

In normal times, governments are better off issuing lots of short-term debt and letting it roll over since the yield curve tends to be upward sloping.

But these weren't normal times. Interest rates faced a secular decline, so going heavy on short was an even better bet!

Instead, governments went long, and literally spent billions more in interest than they would have otherwise.

"Locking in interest rates" is a form of insurance, and like any form of insurance it carries a premium.

So now we've got a bunch of pieces saying the feds aren't doing enough to "lock in rates".

They might be right - this might be a good idea. But we should recognize that governments have been doing this for the last decade and it's paid off really badly.

/thread