Well having traded tons of treasuries...
Investors set those interest rates. Initially at the US Treasury auction and then in the secondary markets. Those investors (very savvy) decide what yield makes sense, taking future inflation into account along with other factors.
Thanks, I was about to answer, glad I looked down-page first. Good summary. Short-term Treasuries now beating liquid cash in banks for the first time in quite a while.
So, you are confirming my assumptions? 🙂