From August last year to 2026-08, the Treasury's average rate paid rose from 3.372% to 3.49% while its average bill rate fell from 4.283% to 3.788%, raising the question of how far financing relief extends. These are average interest rates on existing debt. The bill result therefore cannot stand for the whole debt stock.
Franc treats the average bill rate's move from 4.283% in August last year to 3.788% in 2026-08 as the start of general financing relief. His strongest case is a staggered adjustment: cheaper replacement financing could reach other debt categories over time. That requires the effect to outweigh any offset from debt composition, a mechanism these averages do not establish.
If a security's price assumes that transition, its failure could produce a loss. A cash obligation could force a sale during a temporary price decline, making the capital loss permanent. Dismissing the bill evidence could also miss a beneficial adjustment if relief spreads before prices anticipate it. These averages do not establish whether prices offer that opportunity.
The next test is the Treasury's month-end average rates release, comparing the next matching annual changes for the overall average and bills. Opposite signs would preserve the split, requiring Franc to concede that no common direction is established. If both are negative, his case gains support, but he must concede that convergence does not establish his mechanism; if both are positive, he must abandon the relief claim. If either is zero, the split ends without a shared direction, requiring him to leave the broader turn unresolved.