One reason for raising interest rates was the prospect of a refinancing issue: a

Question

One reason for raising interest rates was the prospect of a refinancing issue: a $12 billion issue matures April 1, and the government is expected to seek some new money, in excess of its refinancing needs. Why doesn't the government get the central bank to wait until after the refinancing before increasing interest rates, so as to minimize its interest costs? Please just answer the question with a straightforward answer, no long and confusing (or copy and pasted) explanations. this question is already on chegg but it makes no sense so please don't copy the same.

Explanation / Answer

The reason for the above is that economic goals of inflation stability and foreign capital inflow in the United States became prinary as compared to the minimization of costs for the government for its refinancing needs. Also, as capital inflow in the economy increases, appreciation of dollar takes place and other currencies are depreciated with respect to dollar which also decreases the loan liability of the government. Thus, macro economic goals of the government were more important to control as compared to minimization of cost for the government.

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