UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number: 811-03894

T. Rowe Price Short-Term Bond Fund, Inc.

(Exact name of registrant as specified in charter)

100 East Pratt Street, Baltimore, MD 21202

(Address of principal executive offices)

David Oestreicher

100 East Pratt Street, Baltimore, MD 21202

(Name and address of agent for service)

Registrant’s telephone number, including area code:  (410) 345-2000

Date of fiscal year end:  May 31

Date of reporting period:  November 30, 2022

Item 1. Reports to Shareholders

(a) Report pursuant to Rule 30e-1

Highlights

and

Market

Commentary

Management’s

Discussion

of

Fund

Performance

Performance

and

Expenses

Financial

Highlights

Portfolio

of

Investments

Financial

Statements

and

Notes

Additional

Fund

Information

November

30,

2022

SemiAnnual

Report

For

more

insights

from

T.

Rowe

Price

investment

professionals,

go

to

troweprice.com

.

T.

ROWE

PRICE

TSDLX

Short

Duration

Income

Fund

–

.

TSIDX

Short

Duration

Income

Fund–

.

I Class

T.

ROWE

PRICE

Short

Duration

Income

Fund

HIGHLIGHTS

The

Short

Duration

Income

Fund

underperformed

its

benchmark

and

its

Lipper

peer

group

average

during

the

six-month

period

ended

November

30,

2022.

Shorter-maturity

bond

markets

were

adversely

impacted

by

macro-

and

interest

rate-driven

volatility

during

the

reporting

period.

Relative

to

the

benchmark,

we

continued

to

underweight

investment-grade

corporate

bonds

while

diversifying

the

portfolio

and

adding

yield

by

overweighting

high

yield

corporate

debt

and

taking

out-of-benchmark

positions

in

securitized

sectors

and

emerging

market

debt.

Using

the

breadth

and

depth

of

our

global

research

platform,

we

will

look

to

selectively

add

to

high-conviction

positions

as

volatility

creates

attractive

entry

points.

Log

in

to

your

account

at

troweprice.com

for

more

information.

*

Certain

mutual

fund

accounts

that

are

assessed

an

annual

account

service

fee

can

also

save

money

by

switching

to

e-delivery.

T.

ROWE

PRICE

Short

Duration

Income

Fund

Market

Commentary

1

Dear

Shareholder

Global

stock

markets

generally

produced

negative

returns

during

the

first

half

of

your

fund’s

fiscal

year,

the

six-month

period

ended

November

30,

2022,

while

rising

bond

yields

weighed

on

returns

for

fixed

income

investors.

Investors

contended

with

tightening

financial

conditions

and

slowing

economic

and

corporate

earnings

growth,

but

hopes

that

persistently

high

inflation

might

be

easing

helped

spark

a

rally

late

in

the

period

that

partially

offset

earlier

losses.

In

the

U.S.,

equity

results

were

mixed.

The

Dow

Jones

Industrial

Average

recorded

positive

results

and

mid-cap

growth

stocks

also

performed

well,

while

most

other

benchmarks

finished

in

negative

territory.

The

S&P

500

Index

was

modestly

negative

for

the

period,

but

results

varied

widely

at

the

sector

level,

with

industrials

and

energy

shares

delivering

strong

gains

while

communication

services

stocks

struggled.

Outside

the

U.S.,

most

major

country

and

regional

benchmarks

lost

ground.

Emerging

markets

stocks

generally

underperformed

shares

in

developed

markets.

Meanwhile,

the

U.S.

dollar

strengthened

versus

most

currencies

during

the

period,

which

weighed

on

returns

for

U.S.

investors

in

international

securities.

Elevated

inflation

remained

a

leading

concern

for

investors

throughout

the

period,

although

hopes

that

inflation

may

have

peaked

led

to

rallies

during

the

summer

and

again

in

November.

The

October

consumer

price

index

report,

which

was

released

in

mid-November,

was

better

than

expected

and

showed

price

increases

easing

from

recent

40-year

highs.

However,

the

7.7%

year-over-

year

increase

in

the

headline

inflation

number

remained

well

above

the

Fed’s

2%

target.

In

response

to

the

high

inflation

readings,

global

central

banks

continued

to

tighten

monetary

policy,

and

investors

focused

on

communications

from

central

bank

officials

on

how

high

rates

would

have

to

go.

The

Federal

Reserve

delivered

four

historically

large

75-basis-point

(0.75

percentage

point)

rate

hikes

during

the

period,

which

lifted

its

short-term

lending

benchmark

to

a

target

range

of

3.75%

to

4.00%

by

early

November,

the

highest

level

since

2008.

As

our

reporting

period

came

to

an

end,

Fed

officials

signaled

that

they

were

likely

to

dial

back

the

pace

of

rate

increases.

Bond

yields

increased

considerably

across

the

Treasury

yield

curve

as

the

Fed

tightened

monetary

policy,

with

the

yield

on

the

benchmark

10-year

U.S.

Treasury

note

climbing

from

2.85%

at

the

start

of

the

period

to

3.68%

at

the

end

of

November.

Significant

inversions

in

the

Treasury

curve,

which

are

often

considered

a

warning

sign

of

a

coming

recession,

occurred

during

the

period

T.

ROWE

PRICE

Short

Duration

Income

Fund

2

as

shorter-maturity

Treasuries

experienced

the

largest

yield

increases.

The

sharp

increase

in

yields

led

to

generally

negative

results

across

the

fixed

income

market

as

bond

prices

and

yields

move

in

opposite

directions.

On

a

positive

note,

the

U.S.

jobs

market

remained

resilient

during

the

period,

and

overall

economic

growth

turned

positive

in

the

third

quarter

after

two

slightly

negative

quarters.

However,

recession

fears

also

grew

as

corporate

earnings

slowed

and

manufacturing

gauges

drifted

toward

contraction

levels.

In

addition,

the

housing

market

began

to

weaken

as

mortgage

rates

climbed

to

the

highest

level

in

more

than

20

years.

The

past

year

has

been

a

trying

time

for

investors

as

few

sectors

remained

untouched

by

the

broad

headwinds

that

markets

faced,

and

volatility

may

continue

in

the

near

term

as

central

banks

tighten

policy

amid

slowing

economic

growth.

However,

in

our

view,

valuations

have

become

more

attractive

across

many

market

sectors

during

the

downturn,

which

provides

potential

opportunities

for

selective

investors

focused

on

fundamentals.

We

believe

this

environment

makes

skilled

active

management

a

critical

tool

for

identifying

risks

and

opportunities,

and

our

investment

teams

will

continue

to

use

fundamental

research

to

identify

securities

that

can

add

value

to

your

portfolio

over

the

long

term.

Thank

you

for

your

continued

confidence

in

T.

Rowe

Price.

Sincerely, 

Robert

Sharps

CEO

and

President

T.

ROWE

PRICE

Short

Duration

Income

Fund

Management’s

Discussion

of

Fund

Performance

3

INVESTMENT

OBJECTIVE 

The

fund

seeks

to

provide

income

consistent

with

limited

fluctuation

in

principal

value

and

liquidity.

FUND

COMMENTARY

How

did

the

fund

perform

in

the

past six

months?

The

Short

Duration

Income

Fund

returned

-2.14%

in

the

six

months

ended

November

30,

2022.

The

fund

underperformed

its

benchmark,

the

Bloomberg

1–3

Year

U.S.

Corporate

Bond

Index,

as

well

as

its

Lipper

peer

group

average.

(Returns

for

the

I

Class

shares

will

vary,

reflecting

a

different

fee

structure.

Past

performance

cannot

guarantee

future

results.

)

What

factors

influenced

the

fund’s

performance?

Shorter-maturity

bond

markets

were

adversely

impacted

by

macro-

and

interest

rate-driven

volatility

during

the

reporting

period.

Macroeconomic

sentiment

was

mixed

as

hopes

of

slower

Federal

Reserve

rate

hikes

supported

risk

assets

before

hawkish

rhetoric,

elevated

inflation,

and

tightness

in

the

labor

market

quelled

expectations

of

capitulation

from

the

Fed.

While

credit

spreads

on

one-

to

three-year

corporate

bonds

ended

the

period

little

changed,

corporate

bonds

produced

negative

absolute

returns

as

rising

U.S.

Treasury

yields

dragged

bond

prices

lower.

(Credit

spreads

are

a

measure

of

the

additional

yield

offered

by

bonds

that

have

credit

risk

compared

with

U.S.

Treasuries

with

similar

maturities.)

Treasuries

declined

in

value

over

the

reporting

period.

Front-end

Treasury

yields

rose

throughout

most

of

the

period

as

investors

priced

in

a

higher-

for-longer

interest

rate

regime.

However,

economic

data

appeared

to

begin

reflecting

tighter

financial

conditions

as

the

period

progressed,

which

revitalized

expectations

for

smaller

rate

hikes

and

sent

yields

on

Treasury

notes

and

bonds

lower

in

November.

The

two-year

Treasury

yield

began

the

period

at

2.53%,

reached

4.72%

in

early

November,

but

ended

the

period

at

4.38%.

PERFORMANCE

COMPARISON

Six-Month

Period

Ended

11/30/22

Total

Return

Short

Duration

Income

Fund

–

.

-2.14‌%

Short

Duration

Income

Fund–

.

I  Class

-2.09‌

Bloomberg

1–3

Year

U.S.

Corporate

Bond

Index

-1.07‌

Lipper

Short

Investment

Grade

Debt

Funds

Average

-1.37‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

4

Sector

allocations

detracted

from

the

fund’s

relative

performance

in

aggregate.

Out-of-benchmark

allocations

to

securitized

sectors

weighed

on

relative

results

alongside

volatility

in

the

rates

market.

Our

allocation

to

residential

mortgage-backed

securities

was

a

prominent

detractor,

as

rate

volatility

and

challenged

liquidity

pushed

the

interest

rate-sensitive

sector’s

spreads

notably

wider.

Conversely,

the

fund’s

allocation

to

investment-grade

(IG)

corporate

bonds

modestly

aided

relative

results

as

we

were

able

to

opportunistically

take

advantage

of

volatility

and

credit

spread

widening

during

the

period

despite

remaining

underweight

the

sector.

In

aggregate,

interest

rate

management

weighed

on

relative

results.

While

yield

curve

positioning

had

a

positive

impact

and

the

fund’s

overall

average

duration

was

neutral

to

its

benchmark,

intra-period

duration

positioning

tilted

higher

at

multiple

points

and

negatively

impacted

total

performance.

(Duration

measures

a

bond’s

or

a

bond

fund’s

sensitivity

to

changes

in

interest

rates.)

Security

selection

among

IG

and

high

yield

corporate

bonds

was

constructive.

Bonds

in

the

consumer

noncyclical

sector

outperformed

as

periods

of

credit

spread

widening

brought

heightened

demand

for

bonds

with

defensive

characteristics.

In

addition,

while

we

are

primarily

a

cash

bond

manager,

we

employ

the

limited

use

of

derivatives

in

our

strategy

for

hedging

purposes.

Derivatives

may

include

futures

and

options,

as

well

as

credit

default

and

interest

rate

swaps.

During

the

reporting

period,

our

use

of

derivatives,

particularly

Treasury

futures,

detracted

from

absolute

performance.

How

is

the

fund

positioned?

Relative

to

the

benchmark,

we

continued

to

underweight

IG

corporate

bonds

while

diversifying

the

portfolio

and

adding

yield

by

overweighting

high

yield

corporate

debt

and

taking

out-of-benchmark

positions

in

securitized

sectors

and

emerging

markets

(EM)

debt.

Corporate

debt

represented

just

above

40%

of

net

assets

at

the

end

of

the

reporting

period.

Bonds

rated

BBB,

which

our

research

analysts

believe

are

often

mispriced

and

offer

attractive

relative

value,

were

a

significant

holding.

At

the

beginning

of

the

period,

we

bolstered

liquidity

and

reduced

our

credit

risk

exposure

across

securitized

sectors,

U.S.

high

yield,

and

IG

corporates

as

the

Fed

turned

hawkish

and

economic

data

showed

further

slowing

and

potential

downside

risks.

As

valuations

and

all-in

yields

(the

total

yield

garnered

from

purchasing

and

holding

a

debt

instrument,

including

coupon

payments

and

new

issue

premiums)

became

increasingly

attractive,

we

deployed

some

of

this

built-up

liquidity

to

increase

our

allocation

to

IG

corporates.

Within

the

asset

class,

we

focused

our

additions

on

higher-

T.

ROWE

PRICE

Short

Duration

Income

Fund

5

quality

bonds

that

were

trading

at

valuations

that

were

disconnected

from

fundamentals,

in

our

view.

In

addition,

we

continued

to

hold

out-of-

benchmark

positions

in

EM

corporate

bonds

to

pick

up

a

yield

advantage

over

IG

corporate

bonds.

Securitized

sectors

continued

to

provide

steady

income

and

diversification

benefits.

We

held

out-of-benchmark

positions

in

securitized

sectors

to

capture

a

risk-

adjusted

yield

advantage

over

IG

corporate

bonds

while

also

diversifying

risk

positioning.

However,

amid

elevated

liquidity

risk,

we

modestly

reduced

our

allocations

to

asset-

backed

securities,

residential

mortgage-backed

securities,

and

commercial

mortgage-

backed

securities.

Ultimately,

we

maintain

a

relatively

sanguine

long-term

view

on

these

sectors

given

supportive

fundamentals

and

credit

structures.

The

potential

for

some

reprieve

in

the

headwinds

from

rates

over

the

next

year

also

makes

these

sectors

compelling

to

us

over

a

longer

time

horizon.

Sources:

Credit

ratings

for

the

securities

held

in

the

fund

are

provided

by

Moody’s,

Standard

&

Poor’s,

and

Fitch

and

are

converted

to

the

Standard

&

Poor’s

nomenclature.

A

rating

of

AAA

represents

the

highest-

rated

securities,

and

a

rating

of

D

represents

the

lowest-

rated

securities.

If

the

rating

agencies

differ,

the

highest

rating

is

applied

to

the

security.

If

a

rating

is

not

available,

the

security

is

classified

as

Not

Rated.

T.

Rowe

Price

uses

the

rating

of

the

underlying

investment

vehicle

to

determine

the

creditworthiness

of

credit

default

swaps.

The

fund

is

not

rated

by

any

agency.

*

U.S.

government

agency

securities

are

issued

or

guaranteed

by

a

U.S.

government

agency

and

may

include

conventional

pass-through

securities

and

collateralized

mortgage

obligations;

unlike

Treasuries,

government

agency

securities

are

not

issued

directly

by

the

U.S.

government

and

are

generally

unrated

but

may

have

credit

support

from

the

U.S.

Treasury

(e.g.,

FHLMC

and

FNMA

issues)

or

a

direct

government

guarantee

(e.g.,

GNMA

issues).

Therefore,

this

category

may

include

rated

and

unrated

securities.

**

U.S.

Treasury

securities

are

issued

by

the

U.S.

Treasury

and

are

backed

by

the

full

faith

and

credit

of

the

U.S.

government.

The

ratings

of

U.S.

Treasury

securities

are

derived

from

the

ratings

on

the

U.S.

government.

CREDIT

QUALITY

DIVERSIFICATION

Short

Duration

Income

Fund

T.

ROWE

PRICE

Short

Duration

Income

Fund

6

Amid

the

hawkish

shift

in

Fed

rhetoric

that

occurred

in

the

summer,

we

moved

down

to

a

roughly

neutral

average

duration

profile

relative

to

the

benchmark.

We

remained

cautious

in

terms

of

adding

duration

while

questions

remained

about

the

Fed’s

monetary

policy

tightening

path,

and

the

fund’s

duration

ended

the

period

lower

than

it

started

as

a

result.

Moving

forward,

we

will

continue

to

monitor

changes

in

economic

data

and

financial

conditions

to

gauge

opportunity

and

risk

in

our

duration

positioning.

What

is

portfolio

management’s

outlook?

While

there

are

signs

that

inflationary

pressures

have

peaked,

the

outlook

remains

uncertain

amid

continued

monetary

policy

tightening,

mounting

downside

growth

risks,

and

elevated

volatility

in

risk

assets.

Financial

conditions

have

rapidly

tightened

this

year,

and

recent

economic

data

releases

show

that

the

economy

has

started

to

cool.

Alongside

signs

of

slowing

economic

growth,

broader

inflation

pressures

are

rotating

into

parts

of

the

economy

where

price

increases

are

more

likely

to

last,

making

the

Fed’s

job

of

containing

price

pressures

even

more

challenging.

The

path

of

monetary

policy

will

be

driven

by

data

that

could

cause

volatility

to

remain

elevated

around

future

data

releases,

and

interest

rate

volatility

will

likely

continue

to

be

a

key

driver

for

credit

spreads.

Consumer

savings

rates

have

dipped

below

their

pre-pandemic

norms

as

consumers

have

used

excess

savings

to

cushion

the

impact

of

higher

prices.

That

said,

many

consumers

and

corporations

have

healthy

reserves

and

limited

leverage,

which

should

help

them

navigate

near-term

inflationary

pressures.

In

this

environment

of

heightened

volatility,

active

management

can

play

an

even

more

instrumental

role

in

achieving

investor

objectives.

Our

continued

goal

is

to

provide

high-quality,

durable

yield

and

income

appropriate

for

a

short-term

bond

strategy

with

modest

credit

and

duration

risk.

Using

the

breadth

and

depth

of

our

global

research

platform,

we

will

look

to

selectively

add

to

high-conviction

positions

as

volatility

creates

attractive

entry

points.

The

views

expressed

reflect

the

opinions

of

T.

Rowe

Price

as

of

the

date

of

this

report

and

are

subject

to

change

based

on

changes

in

market,

economic,

or

other

conditions.

These

views

are

not

intended

to

be

a

forecast

of

future

events

and

are

no

guarantee

of

future

results.

T.

ROWE

PRICE

Short

Duration

Income

Fund

7

RISKS

OF

INVESTING

IN

FIXED

INCOME

SECURITIES

The

value

of

investments

held

by

the

fund

may

decline,

sometimes

rapidly

or

unpredictably,

due

to

factors

affecting

certain

issuers,

particular

industries

or

sectors,

or

the

overall

markets.

Rapid

changes

in

interest

rates

may

increase

the

fund’s

overall

exposure

to

interest

rate

risk.

An

issuer

of

a

debt

instrument

held

by

the

fund

could

default

(fail

to

make

scheduled

interest

or

principal

payments),

potentially

reducing

the

fund’s

income

and

share

price.

Holdings

rated

below

investment

grade

should

be

regarded

as

speculative

because

their

issuers

may

be

more

susceptible

to

financial

setbacks

and

recession

than

more

creditworthy

issuers

(commonly

referred

to

as

“junk”).

Investments

in

emerging

markets

are

subject

to

the

risk

of

abrupt

and

severe

price

declines.

BENCHMARK

INFORMATION

Note:

Bloomberg

®

and the

Bloomberg

1–3

Year

U.S.

Corporate

Bond

Index

are

service

marks

of

Bloomberg

Finance

L.P.

and

its

affiliates,

including

Bloomberg

Index

Services

Limited

(“BISL”),

the

administrator

of

the

index

(collectively,

“Bloomberg”)

and

have

been

licensed

for

use

for

certain

purposes

by

T.

Rowe

Price.

Bloomberg

is

not

affiliated

with

T.

Rowe

Price,

and

Bloomberg

does

not

approve,

endorse,

review,

or

recommend

its

products.

Bloomberg

does

not

guarantee

the

timeliness,

accurateness,

or

completeness

of

any

data

or

information

relating

to

its

products. 

Note:

Copyright

©

2022

Fitch

Ratings,

Inc.,

Fitch

Ratings

Ltd.

and

its

subsidiaries.

Note:

Portions

of

the

mutual

fund

information

contained

in

this

report

were

supplied

by

Lipper,

a

Refinitiv

Company,

subject

to

the

following:

Copyright

2022

©

Refinitiv.

All

rights

reserved.

Any

copying,

republication

or

redistribution

of

Lipper

content

is

expressly

prohibited

without

the

prior

written

consent

of

Lipper.

Lipper

shall

not

be

liable

for

any

errors

or

delays

in

the

content,

or

for

any

actions

taken

in

reliance

thereon.

Note:

©

2022,

Moody’s

Corporation,

Moody’s

Investors

Service,

Inc.,

Moody’s

Analytics,

Inc.

and/or

their

licensors

and

affiliates

(collectively,

“Moody’s”).

All

rights

reserved.

Moody’s

ratings

and

other

information

(“Moody’s

Information”)

are

proprietary

to

Moody’s

and/or

its

licensors

and

are

protected

by

copyright

and

other

intellectual

property

laws.

Moody’s

Information

is

licensed

to

Client

by

Moody’s.

MOODY’S

INFORMATION

MAY

NOT

BE

COPIED

OR

OTHERWISE

REPRODUCED,

REPACKAGED,

FURTHER

TRANSMITTED,

TRANSFERRED,

DISSEMINATED,

REDISTRIBUTED

T.

ROWE

PRICE

Short

Duration

Income

Fund

8

OR

RESOLD,

OR

STORED

FOR

SUBSEQUENT

USE

FOR

ANY

SUCH

PURPOSE,

IN

WHOLE

OR

IN

PART,

IN

ANY

FORM

OR

MANNER

OR

BY

ANY

MEANS

WHATSOEVER,

BY

ANY

PERSON

WITHOUT

MOODY’S

PRIOR

WRITTEN

CONSENT.

Moody's

®

is

a

registered

trademark.

Note:

Copyright

©

2022,

S&P

Global

Market

Intelligence

(and

its

affiliates,

as

applicable).

Reproduction

of

any

information,

data

or

material,

including

ratings

("Content")

in

any

form

is

prohibited

except

with

the

prior

written

permission

of

the

relevant

party. Such

party,

its

affiliates

and

suppliers

("Content

Providers")

do

not

guarantee

the

accuracy,

adequacy,

completeness,

timeliness

or

availability

of

any

Content

and

are

not

responsible

for

any

errors

or

omissions

(negligent

or

otherwise),

regardless

of

the

cause,

or

for

the

results

obtained

from

the

use

of

such

Content.

In

no

event

shall

Content

Providers

be

liable

for

any

damages,

costs,

expenses,

legal

fees,

or

losses

(including

lost

income

or

lost

profit

and

opportunity

costs)

in

connection

with

any

use

of

the

Content.

A

reference

to

a

particular

investment

or

security,

a

rating

or

any

observation

concerning

an

investment

that

is

part

of

the

Content

is

not

a

recommendation

to

buy,

sell

or

hold

such

investment

or

security,

does

not

address

the

appropriateness

of

an

investment

or

security

and

should

not

be

relied

on

as

investment

advice.

Credit

ratings

are

statements

of

opinions

and

are

not

statements

of

fact.

BENCHMARK

INFORMATION

(continued)

T.

ROWE

PRICE

Short

Duration

Income

Fund

9

GROWTH

OF

$10,000 

This

chart

shows

the

value

of

a

hypothetical

$10,000

investment

in

the

fund

over

the

past

10

fiscal

year

periods

or

since

inception

(for funds

lacking

10-year

records).

The

result

is

compared

with

benchmarks,

which

include

a

broad-based

market

index

and

may

also

include

a

peer

group

average

or

index.

Market

indexes

do

not

include

expenses,

which

are

deducted

from

fund

returns

as

well

as

mutual fund

averages

and

indexes.

SHORT

DURATION

INCOME

FUND 

Note:

Performance

for

the

I

Class share

will

vary

due

to

its differing

fee

structure.

See

the

Average

Annual

Compound

Total

Return

table. 

*The

Lipper

Short

Investment

Grade

Debt

Funds

Average

is

from

12/31/20.

AVERAGE

ANNUAL

COMPOUND

TOTAL

RETURN

Periods

Ended

11/30/22

1

Year

Since

Inception

12/8/20

Short

Duration

Income

Fund

–

.

-5.42‌%

-2.33‌%

Short

Duration

Income

Fund–

.

I  Class

-5.32‌

-2.23‌

This

table

shows

how

the

fund

would

have

performed

each

year

if

its

actual

(or

cumulative)

returns

for

the

periods

shown

had

been

earned

at

a

constant

rate.

Returns

do

not

reflect

taxes

that

the

shareholder

may

pay

on

fund

distributions

or

the

redemption

of

fund

shares.

Past

performance

cannot

guarantee

future

results.

T.

ROWE

PRICE

Short

Duration

Income

Fund

10

EXPENSE

RATIO

FUND

EXPENSE

EXAMPLE

As

a

mutual

fund

shareholder,

you

may

incur

two

types

of

costs:

(1)

transaction

costs,

such

as

redemption

fees

or

sales

loads,

and

(2)

ongoing

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

fund

expenses.

The

following

example

is

intended

to

help

you

understand

your

ongoing

costs

(in

dollars)

of

investing

in

the

fund

and

to

compare

these

costs

with

the

ongoing

costs

of

investing

in

other

mutual

funds.

The

example

is

based

on

an

investment

of

$1,000

invested

at

the

beginning

of

the

most

recent

six-month

period

and

held

for

the

entire

period.

Please

note

that

the

fund

has

two

share

classes:

The

original

share

class

(Investor

Class)

charges

no

distribution

and

service

(12b-1)

fee,

and

the

I

Class

shares

are

also

available

to

institutionally

oriented

clients

and

impose

no

12b-1

or

administrative

fee

payment.

Each

share

class

is

presented

separately

in

the

table.

Actual

Expenses

The

first

line

of

the

following

table

(Actual)

provides

information

about

actual

account

values

and

expenses

based

on

the

fund’s

actual

returns.

You

may

use

the

information

on

this

line,

together

with

your

account

balance,

to

estimate

the

expenses

that

you

paid

over

the

period.

Simply

divide

your

account

value

by

$1,000

(for

example,

an

$8,600

account

value

divided

by

$1,000

=

8.6),

then

multiply

the

result

by

the

number

on

the

first

line

under

the

heading

“Expenses

Paid

During

Period”

to

estimate

the

expenses

you

paid

on

your

account

during

this

period.

Hypothetical

Example

for

Comparison

Purposes

The

information

on

the

second

line

of

the

table

(Hypothetical)

is

based

on

hypothetical

account

values

and

expenses

derived

from

the

fund’s

actual

expense

ratio

and

an

assumed

5%

per

year

rate

of

return

before

expenses

(not

the

fund’s

actual

return).

You

may

compare

the

ongoing

costs

of

investing

in

the

fund

with

other

funds

by

contrasting

this

5%

hypothetical

example

and

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

the

other

funds.

The

hypothetical

account

values

and

expenses

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period.

Short

Duration

Income

Fund

0.97‌%

Short

Duration

Income

Fund–I

Class

0.93‌ 

The

expense

ratio

shown

is

as

of

the

fund’s

most

recent

prospectus.

This

number

may

vary

from

the

expense

ratio

shown

elsewhere

in

this

report

because

it

is

based

on

a

different

time

period

and,

if

applicable,

includes

acquired

fund

fees

and

expenses

but

does

not

include

fee

or

expense

waivers.

T.

ROWE

PRICE

Short

Duration

Income

Fund

11

Note:

T.

Rowe

Price

charges

an

annual

account

service

fee

of

$20,

generally

for

accounts

with

less

than

$10,000.

The

fee

is

waived

for

any

investor

whose

T.

Rowe

Price

mutual

fund

accounts

total

$50,000

or

more;

accounts

electing

to

receive

electronic

delivery

of

account

statements,

transaction

confirmations,

prospectuses,

and

shareholder

reports;

or

accounts

of

an

investor

who

is

a

T.

Rowe

Price

Personal

Services

or

Enhanced

Personal

Services

client

(enrollment

in

these

programs

generally

requires

T.

Rowe

Price

assets

of

at

least

$250,000).

This

fee

is

not

included

in

the

accompanying

table.

If

you

are

subject

to

the

fee,

keep

it

in

mind

when

you

are

estimating

the

ongoing

expenses

of

investing

in

the

fund

and

when

comparing

the

expenses

of

this

fund

with

other

funds.

You

should

also

be

aware

that

the

expenses

shown

in

the

table

highlight

only

your

ongoing

costs

and

do

not

reflect

any

transaction

costs,

such

as

redemption

fees

or

sales

loads.

Therefore,

the

second

line

of

the

table

is

useful

in

comparing

ongoing

costs

only

and

will

not

help

you

determine

the

relative

total

costs

of

owning

different

funds.

To

the

extent

a

fund

charges

transaction

costs,

however,

the

total

cost

of

owning

that

fund

is

higher.

SHORT

DURATION

INCOME

FUND

Beginning

Account

Value

6/1/22

Ending

Account

Value

11/30/22

Expenses

Paid

During

Period*

6/1/22

to

11/30/22

Investor

Class

Actual

$1,000.00

$978.60

$1.98

Hypothetical

(assumes

5%

return

before

expenses)

 1,000.00

  1,023.06

  2.03

I

Class

Actual

  1,000.00

  979.10

  1.49

Hypothetical

(assumes

5%

return

before

expenses)

 1,000.00

  1,023.56

  1.52

*

Expenses

are

equal

to

the

fund’s

annualized

expense

ratio

for

the

6-month

period,

multiplied

by

the

average

account

value

over

the

period,

multiplied

by

the

number

of

days

in

the

most

recent

fiscal

half

year

(183),

and

divided

by

the

days

in

the

year

(365)

to

reflect

the

half-year

period.

The

annualized

expense

ratio

of

the

Investor

Class

was

0.40%,

and

the

I Class

was

0.30%.

FUND

EXPENSE

EXAMPLE

(CONTINUED)

T.

ROWE

PRICE

Short

Duration

Income

Fund

12

QUARTER-END

RETURNS

Periods

Ended

9/30/22

1

Year

Since

Inception

12/8/20

Short

Duration

Income

Fund

–

.

-6.60‌%

-2.88‌%

Short

Duration

Income

Fund–

.

I  Class

-6.50‌ 

-2.77‌ 

The

fund’s

performance

information

represents

only

past

performance

and

is

not

necessarily

an

indication

of

future

results.

Current

performance

may

be

lower

or

higher

than

the

performance

data

cited.

Share

price,

principal

value,

and

return

will

vary,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

For

the

most

recent

month-end

performance,

please

visit

our

website

(troweprice.com)

or

contact

a

T.

Rowe

Price

representative

at

1

-

800

-

225

-

5132

or,

for

200

I

Class

shares,

1-800-638-8790

.

This

table

provides

returns

through

the

most

recent

calendar

quarter-end

rather

than

through

the

end

of

the

fund’s

fiscal

period.

It

shows

how

each

class

would

have

performed

each

year

if

its

actual

(or

cumulative)

returns

for

the

periods

shown

had

been

earned

at

a

constant

rate.

Average

annual

total

return

figures

include

changes

in

principal

value,

reinvested

dividends,

and

capital

gain

distributions.

Returns

do

not

reflect

taxes

that

the

shareholder

may

pay

on

fund

distributions

or

the

redemption

of

fund

shares.

When

assessing

performance,

investors

should

consider

both

short-

and

long-term

returns.

T.

ROWE

PRICE

Short

Duration

Income

Fund

(Unaudited)

Financial

Highlights

13

For

a

share

outstanding

throughout

each

period

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Investor

Class

(1)

6

Months

.

Ended

11/30/22

.

.

Year

Ended

5/31/22

12/8/20

(1)

Through

5/31/21

NET

ASSET

VALUE

Beginning

of

period

$

9.51‌

$

10.05‌

$

10.00‌

Investment

activities

Net

investment

income

(2)(3)

0.13‌

0.17‌

0.07‌

Net

realized

and

unrealized

gain/loss

(0.33‌)

(0.53‌)

0.05‌

Total

from

investment

activities

(0.20‌)

(0.36‌)

0.12‌

Distributions

Net

investment

income

(0.13‌)

(0.17‌)

(0.07‌)

Net

realized

gain

—‌

(0.01‌)

—‌

Total

distributions

(0.13‌)

(0.18‌)

(0.07‌)

NET

ASSET

VALUE

End

of

period

$

9.18‌

$

9.51‌

$

10.05‌

Ratios/Supplemental

Data

Total

return

(3)(4)

(2.14‌)%

(3.64‌)%

1.21‌%

Ratios

to

average

net

assets:

(3)

Gross

expenses

before

waivers/payments

by

Price

Associates

1.07‌%

(5)

0.97‌%

1.32‌%

(5)

Net

expenses

after

waivers/payments

by

Price

Associates

0.40‌%

(5)

0.40‌%

0.40‌%

(5)

Net

investment

income

2.77‌%

(5)

1.72‌%

1.47‌%

(5)

Portfolio

turnover

rate

49.4‌%

60.1‌%

24.7‌%

Net

assets,

end

of

period

(in

thousands)

$29,198

$31,100

$42,912

0‌%

0‌%

0‌%

(1)

Inception

date

(2)

Per

share

amounts

calculated

using

average

shares

outstanding

method.

(3)

See

Note

6

for

details

of

expense-related

arrangements

with

Price

Associates.

(4)

Total

return

reflects

the

rate

that

an

investor

would

have

earned

on

an

investment

in

the

fund

during

each

period,

assuming

reinvestment

of

all

distributions,

and

payment

of

no

redemption

or

account

fees,

if

applicable.

Total

return

is

not

annualized

for

periods

less

than

one

year.

(5)

Annualized

T.

ROWE

PRICE

Short

Duration

Income

Fund

(Unaudited)

Financial

Highlights

14

For

a

share

outstanding

throughout

each

period

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

I

Class

(1)

6

Months

.

Ended

11/30/22

.

.

Year

Ended

5/31/22

12/8/20

(1)

Through

5/31/21

NET

ASSET

VALUE

Beginning

of

period

$

9.51‌

$

10.05‌

$

10.00‌

Investment

activities

Net

investment

income

(2)(3)

0.13‌

0.19‌

0.07‌

Net

realized

and

unrealized

gain/loss

(0.33‌)

(0.54‌)

0.06‌

Total

from

investment

activities

(0.20‌)

(0.35‌)

0.13‌

Distributions

Net

investment

income

(0.13‌)

(0.18‌)

(0.08‌)

Net

realized

gain

—‌

(0.01‌)

—‌

Total

distributions

(0.13‌)

(0.19‌)

(0.08‌)

NET

ASSET

VALUE

End

of

period

$

9.18‌

$

9.51‌

$

10.05‌

Ratios/Supplemental

Data

Total

return

(3)(4)

(2.09‌)%

(3.53‌)%

1.27‌%

Ratios

to

average

net

assets:

(3)

Gross

expenses

before

waivers/payments

by

Price

Associates

0.98‌%

(5)

0.93‌%

1.49‌%

(5)

Net

expenses

after

waivers/payments

by

Price

Associates

0.30‌%

(5)

0.29‌%

0.29‌%

(5)

Net

investment

income

2.88‌%

(5)

1.98‌%

1.57‌%

(5)

Portfolio

turnover

rate

49.4‌%

60.1‌%

24.7‌%

Net

assets,

end

of

period

(in

thousands)

$17,645

$17,250

$251

0‌%

0‌%

0‌%

(1)

Inception

date

(2)

Per

share

amounts

calculated

using

average

shares

outstanding

method.

(3)

See

Note

6

for

details

of

expense-related

arrangements

with

Price

Associates.

(4)

Total

return

reflects

the

rate

that

an

investor

would

have

earned

on

an

investment

in

the

fund

during

each

period,

assuming

reinvestment

of

all

distributions,

and

payment

of

no

redemption

or

account

fees,

if

applicable.

Total

return

is

not

annualized

for

periods

less

than

one

year.

(5)

Annualized

T.

ROWE

PRICE

Short

Duration

Income

Fund

November

30,

2022

(Unaudited)

15

Portfolio

of

Investments

‡

Par/Shares

$

Value

(Amounts

in

000s)

‡

ASSET-BACKED

SECURITIES

16.2%

Car

Loan

6.1%

AmeriCredit

Automobile

Receivables

Trust

Series 2020-2,

Class

D

2.13%,

3/18/26 

120‌

112‌

Avis

Budget

Rental

Car

Funding

AESOP

Series 2018-1A,

Class

D

5.25%,

9/20/24  (1)

110‌

108‌

Carmax

Auto

Owner

Trust

Series 2020-1,

Class

D

2.64%,

7/15/26 

115‌

109‌

CarMax

Auto

Owner

Trust

Series 2020-3,

Class

C

1.69%,

4/15/26 

50‌

47‌

CarMax

Auto

Owner

Trust

Series 2021-2,

Class

C

1.34%,

2/16/27 

250‌

224‌

Drive

Auto

Receivables

Trust

Series 2021-1,

Class

D

1.45%,

1/16/29 

150‌

140‌

Exeter

Automobile

Receivables

Trust

Series 2021-2A,

Class

C

0.98%,

6/15/26 

75‌

71‌

Exeter

Automobile

Receivables

Trust

Series 2022-4A,

Class

D

5.98%,

12/15/28 

45‌

42‌

Exeter

Automobile

Receivables

Trust

Series 2022-64,

Class

A3

5.70%,

8/17/26 

25‌

25‌

Ford

Credit

Auto

Lease

Trust

Series 2022-A,

Class

C

4.18%,

10/15/25 

255‌

247‌

GM

Financial

Automobile

Leasing

Trust

Series 2021-1,

Class

D

1.01%,

7/21/25 

140‌

134‌

GM

Financial

Automobile

Leasing

Trust

Series 2022-3,

Class

C

5.13%,

8/20/26 

245‌

239‌

GM

Financial

Consumer

Automobile

Receivables

Trust

Series 2020-3,

Class

C

1.37%,

1/16/26 

30‌

28‌

GM

Financial

Consumer

Automobile

Receivables

Trust

Series 2020-4,

Class

C

1.05%,

5/18/26 

50‌

46‌

JPMorgan

Chase

Bank

Series 2021-2,

Class

D

1.138%,

12/26/28  (1)

115‌

109‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

16

Par/Shares

$

Value

(Amounts

in

000s)

‡

Santander

Bank

-

SBCLN

Series 2021-1A,

Class

C

3.268%,

12/15/31  (1)

319‌

307‌

Santander

Consumer

Auto

Receivables

Trust

Series 2020-BA,

Class

C

1.29%,

4/15/26  (1)

100‌

96‌

Santander

Consumer

Auto

Receivables

Trust

Series 2021-AA,

Class

D

1.57%,

1/15/27  (1)

100‌

90‌

Santander

Consumer

Auto

Receivables

Trust

Series 2021-CA,

Class

C

2.97%,

6/15/28  (1)

300‌

291‌

Santander

Retail

Auto

Lease

Trust

Series 2021-C,

Class

D

1.39%,

8/20/26  (1)

350‌

320‌

World

Omni

Auto

Receivables

Trust

Series 2020-C,

Class

C

1.39%,

5/17/27 

85‌

79‌

2,864‌

Other

Asset-Backed

Securities

9.0%

Amur

Equipment

Finance

Receivables

XI

Series 2022-2A,

Class

A2

5.30%,

6/21/28  (1)

100‌

99‌

Applebee's

Funding

Series 2019-1A,

Class

A2I

4.194%,

6/5/49  (1)

248‌

234‌

Benefit

Street

Partners

XI

Series 2017-11A,

Class

A2R,

CLO,

FRN

3M

USD

LIBOR

+

1.50%,

5.579%,

4/15/29  (1)

250‌

241‌

Blackbird

Capital

Aircraft

Lease

Securitization

Series 2016-1A,

Class

AA,

STEP

2.487%,

12/16/41  (1)

64‌

59‌

CBAM

Series 2019-9A,

Class

B1,

CLO,

FRN

3M

USD

LIBOR

+

1.90%,

5.979%,

2/12/30  (1)

250‌

244‌

Cedar

Funding

VII

Series 2018-7A,

Class

B,

CLO,

FRN

3M

USD

LIBOR

+

1.40%,

5.643%,

1/20/31  (1)

250‌

239‌

DB

Master

Finance

Series 2019-1A,

Class

A2II

4.021%,

5/20/49  (1)

92‌

85‌

Elara

HGV

Timeshare

Issuer

Series 2016-A,

Class

A

2.73%,

4/25/28  (1)

11‌

11‌

Elara

HGV

Timeshare

Issuer

Series 2019-A,

Class

A

2.61%,

1/25/34  (1)

81‌

75‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

17

Par/Shares

$

Value

(Amounts

in

000s)

‡

Hilton

Grand

Vacations

Trust

Series 2017-AA,

Class

B

2.96%,

12/26/28  (1)

69‌

67‌

Hilton

Grand

Vacations

Trust

Series 2019-AA,

Class

B

2.54%,

7/25/33  (1)

106‌

99‌

KKR

Series 29A,

Class

A,

CLO,

FRN

3M

USD

LIBOR

+

1.20%,

5.279%,

1/15/32  (1)

250‌

245‌

Madison

Park

Funding

XXIII

Series 2017-23A,

Class

AR,

CLO,

FRN

3M

USD

LIBOR

+

0.97%,

5.328%,

7/27/31  (1)

250‌

245‌

Madison

Park

Funding

XXXVII

Series 2019-37A,

Class

AR,

CLO,

FRN

3M

USD

LIBOR

+

1.07%,

5.149%,

7/15/33  (1)

250‌

244‌

MVW

Series 2021-1WA,

Class

C

1.94%,

1/22/41  (1)

71‌

63‌

MVW

Owner

Trust

Series 2017-1A,

Class

B

2.75%,

12/20/34  (1)

81‌

78‌

OCP

Series 2014-7A,

Class

A1RR,

CLO,

FRN

3M

USD

LIBOR

+

1.12%,

5.363%,

7/20/29  (1)

281‌

277‌

OCP

Series 2017-13A,

Class

A2R,

CLO,

FRN

3M

USD

LIBOR

+

1.55%,

5.629%,

7/15/30  (1)

250‌

241‌

Octagon

Investment

Partners

Series 2016-1A,

Class

AR,

CLO,

FRN

3M

USD

LIBOR

+

1.18%,

5.505%,

1/24/33  (1)

250‌

242‌

Octane

Receivables

Trust

Series 2021-2A,

Class

A

1.21%,

9/20/28  (1)

57‌

54‌

Octane

Receivables

Trust

Series 2022-1A,

Class

B

4.90%,

5/22/28  (1)

150‌

144‌

Octane

Receivables

Trust

Series 2022-2A,

Class

A

5.11%,

2/22/28  (1)

100‌

99‌

Planet

Fitness

Master

Issuer

Series 2018-1A,

Class

A2II

4.666%,

9/5/48  (1)

197‌

184‌

Sierra

Timeshare

Receivables

Funding

Series 2021-1A,

Class

B

1.34%,

11/20/37  (1)

120‌

110‌

Sierra

Timeshare

Receivables

Funding

Series 2021-1A,

Class

C

1.79%,

11/20/37  (1)

40‌

37‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

18

Par/Shares

$

Value

(Amounts

in

000s)

‡

Symphony

Static

I

Series 2021-1A,

Class

C,

CLO,

FRN

3M

USD

LIBOR

+

1.85%,

6.208%,

10/25/29  (1)

250‌

234‌

Symphony

XXIII

Series 2020-23A,

Class

AR,

CLO,

FRN

3M

USD

LIBOR

+

1.02%,

5.099%,

1/15/34  (1)

250‌

244‌

Verizon

Master

Trust

Series 2021-1,

Class

A

0.50%,

5/20/27 

15‌

14‌

4,208‌

Student

Loan

1.1%

Navient

Private

Education

Loan

Trust

Series 2020-A,

Class

A2A

2.46%,

11/15/68  (1)

78‌

70‌

Navient

Private

Education

Refi

Loan

Trust

Series 2018-A,

Class

A2

3.19%,

2/18/42  (1)

12‌

11‌

Navient

Private

Education

Refi

Loan

Trust

Series 2019-A,

Class

A2A

3.42%,

1/15/43  (1)

50‌

47‌

Navient

Private

Education

Refi

Loan

Trust

Series 2019-D,

Class

A2A

3.01%,

12/15/59  (1)

101‌

92‌

Navient

Private

Education

Refi

Loan

Trust

Series 2019-GA,

Class

A

2.40%,

10/15/68  (1)

70‌

64‌

SMB

Private

Education

Loan

Trust

Series 2016-C,

Class

A2A

2.34%,

9/15/34  (1)

25‌

24‌

SMB

Private

Education

Loan

Trust

Series 2017-B,

Class

B

3.50%,

12/16/41  (1)

150‌

135‌

SMB

Private

Education

Loan

Trust

Series 2020-A,

Class

A2A

2.23%,

9/15/37  (1)

70‌

64‌

507‌

Total

Asset-Backed

Securities

(Cost

$8,001)

7,579‌

BANK

LOANS

2.2%

(2)

Consumer

Non-Cyclical

0.9%

PetVet

Care

Centers,

FRN,

1M

USD

LIBOR

+

3.50%,

7.571%,

2/14/25 

198‌

183‌

Surgery

Center

Holdings,

FRN,

1M

USD

LIBOR

+

3.75%,

7.63%,

8/31/26 

251‌

246‌

429‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

19

Par/Shares

$

Value

(Amounts

in

000s)

‡

Insurance

0.9%

Asurion,

FRN,

1M

USD

LIBOR

+

3.00%,

7.071%,

11/3/24 

252‌

241‌

HUB

International,

FRN,

1M

USD

LIBOR

+

3.00%,

7.327%,

4/25/25 

189‌

185‌

426‌

Technology

0.4%

Applied

Systems,

FRN,

1M

USD

LIBOR

+

3.00%,

6.674%,

9/19/24 

199‌

198‌

198‌

Total

Bank

Loans

(Cost

$1,085)

1,053‌

CORPORATE

BONDS

35.5%

Banking

10.5%

Banco

de

Bogota,

6.25%,

5/12/26 

200‌

192‌

Banco

de

Credito

del

Peru

S.A.,

4.25%,

4/1/23 

200‌

199‌

Banco

Santander,

2.746%,

5/28/25 

200‌

188‌

Banco

Santander

Mexico

Institucion

de

Banca

Multiple

Grupo

Financiero

Santand,

5.375%,

4/17/25 

150‌

149‌

Bank

of

America,

VR,

0.976%,

4/22/25  (3)

350‌

327‌

Bank

of

Ireland

Group,

4.50%,

11/25/23  (1)

200‌

196‌

Bank

of

Montreal,

Series H,

4.25%,

9/14/24 

200‌

198‌

Barclays,

VR,

5.304%,

8/9/26  (3)

200‌

196‌

Barclays,

VR,

7.325%,

11/2/26  (3)

200‌

205‌

BBVA

Bancomer,

4.375%,

4/10/24 

150‌

148‌

Citigroup,

VR,

0.981%,

5/1/25  (3)

150‌

140‌

Citigroup,

VR,

4.14%,

5/24/25  (3)

105‌

103‌

Credit

Suisse

Group,

VR,

2.997%,

12/14/23  (1)(3)

250‌

247‌

Danske

Bank,

5.375%,

1/12/24  (1)

200‌

198‌

Goldman

Sachs

Group,

5.70%,

11/1/24 

200‌

202‌

Goldman

Sachs

Group,

VR,

1.757%,

1/24/25  (3)

175‌

166‌

HSBC

Holdings,

4.25%,

3/14/24 

200‌

196‌

Lloyds

Banking

Group,

4.50%,

11/4/24 

200‌

194‌

Mitsubishi

UFJ

Financial

Group,

VR,

5.063%,

9/12/25  (3)

200‌

198‌

Morgan

Stanley,

VR,

0.731%,

4/5/24  (3)

210‌

206‌

NatWest

Group,

VR,

7.472%,

11/10/26  (3)

200‌

208‌

PNC

Financial

Services

Group,

VR,

5.671%,

10/28/25  (3)

135‌

136‌

Societe

Generale,

2.625%,

10/16/24  (1)

200‌

188‌

UBS

Group,

VR,

4.488%,

5/12/26  (1)(3)

200‌

195‌

Wells

Fargo,

VR,

3.908%,

4/25/26  (3)

200‌

194‌

Wells

Fargo,

VR,

4.54%,

8/15/26  (3)

150‌

147‌

4,916‌

Basic

Industry

1.9%

ArcelorMittal,

3.60%,

7/16/24 

130‌

126‌

Celanese

U.S.

Holdings,

6.05%,

3/15/25 

155‌

154‌

Celulosa

Arauco

y

Constitucion,

4.50%,

8/1/24 

200‌

197‌

Cia

de

Minas

Buenaventura,

5.50%,

7/23/26  (1)

200‌

173‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

20

Par/Shares

$

Value

(Amounts

in

000s)

‡

Suzano

Austria,

5.75%,

7/14/26 

200‌

200‌

Westlake,

0.875%,

8/15/24 

25‌

23‌

873‌

Brokerage

Assetmanagers

Exchanges

0.4%

LSEGA

Financing,

1.375%,

4/6/26  (1)

200‌

176‌

176‌

Communications

2.6%

Axian

Telecom,

7.375%,

2/16/27 

200‌

176‌

CSC

Holdings,

5.25%,

6/1/24 

95‌

91‌

Magallanes,

3.428%,

3/15/24  (1)

150‌

145‌

Sable

International

Finance,

5.75%,

9/7/27  (1)

200‌

183‌

SBA

Tower

Trust,

6.599%,

1/15/28  (1)

115‌

115‌

Tower

Bersama

Infrastructure,

4.25%,

1/21/25 

200‌

192‌

Townsquare

Media,

6.875%,

2/1/26  (1)

165‌

153‌

Warnermedia

Holdings,

3.755%,

3/15/27  (1)

155‌

141‌

1,196‌

Consumer

Cyclical

4.6%

7-Eleven,

0.80%,

2/10/24  (1)

45‌

43‌

Daimler

Trucks

Finance

North

America,

1.625%,

12/13/24  (1)

170‌

158‌

Ford

Motor

Credit,

5.125%,

6/16/25 

200‌

194‌

General

Motors

Financial,

1.05%,

3/8/24 

150‌

141‌

Hyatt

Hotels,

1.30%,

10/1/23 

60‌

58‌

Hyundai

Capital

America,

0.80%,

1/8/24  (1)

150‌

142‌

Jaguar

Land

Rover

Automotive,

7.75%,

10/15/25  (1)

200‌

181‌

Lowe's,

4.40%,

9/8/25 

70‌

69‌

Marriott

International,

3.125%,

2/15/23 

100‌

100‌

Mercedes-Benz

Finance

North

America,

5.375%,

11/26/25  (1)

200‌

201‌

Nissan

Motor,

3.043%,

9/15/23  (1)

200‌

195‌

Nordstrom,

2.30%,

4/8/24 

155‌

145‌

QVC,

4.85%,

4/1/24 

150‌

141‌

Stellantis

Finance

U.S.,

1.711%,

1/29/27  (1)

200‌

173‌

Volkswagen

Group

of

America

Finance,

3.95%,

6/6/25  (1)

200‌

194‌

2,135‌

Consumer

Non-Cyclical

3.2%

Brunswick,

0.85%,

8/18/24 

115‌

105‌

CD&R

Smokey

Buyer,

6.75%,

7/15/25  (1)

175‌

156‌

CSL

Finance,

3.85%,

4/27/27  (1)

25‌

24‌

HCA,

5.25%,

4/15/25 

200‌

199‌

Hikma

Finance

USA,

3.25%,

7/9/25 

200‌

185‌

Kimberly-Clark

de

Mexico,

3.80%,

4/8/24 

200‌

195‌

Legacy

LifePoint

Health,

6.75%,

4/15/25  (1)

170‌

155‌

Mondelez

International

Holdings

Netherlands,

4.25%,

9/15/25  (1)

200‌

197‌

Performance

Food

Group,

6.875%,

5/1/25  (1)

95‌

95‌

Teva

Pharmaceutical

Finance

Netherlands

III,

6.00%,

4/15/24 

200‌

197‌

1,508‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

21

Par/Shares

$

Value

(Amounts

in

000s)

‡

Electric

3.1%

AES,

3.30%,

7/15/25  (1)

100‌

94‌

Alexander

Funding

Trust,

1.841%,

11/15/23  (1)

200‌

188‌

DTE

Energy,

STEP,

4.22%,

11/1/24 

65‌

64‌

Enel

Finance

International,

6.80%,

10/14/25  (1)

200‌

206‌

Engie

Energia

Chile,

4.50%,

1/29/25 

200‌

192‌

NRG

Energy,

3.75%,

6/15/24  (1)

150‌

145‌

Pacific

Gas

&

Electric,

3.50%,

6/15/25 

100‌

94‌

Southern,

STEP,

4.475%,

8/1/24 

125‌

123‌

Vistra

Operations,

3.55%,

7/15/24  (1)

200‌

191‌

Vistra

Operations,

5.125%,

5/13/25  (1)

150‌

147‌

1,444‌

Energy

3.0%

Aker

BP,

3.00%,

1/15/25  (1)

150‌

142‌

Continental

Resources,

3.80%,

6/1/24 

50‌

49‌

Continental

Resources,

4.50%,

4/15/23 

100‌

100‌

Energy

Transfer,

2.90%,

5/15/25 

100‌

94‌

Energy

Transfer,

4.90%,

2/1/24 

60‌

60‌

Gray

Oak

Pipeline,

2.00%,

9/15/23  (1)

100‌

97‌

Leviathan

Bond,

5.75%,

6/30/23  (1)

200‌

199‌

Southwestern

Energy,

8.375%,

9/15/28 

175‌

183‌

Targa

Resources

Partners,

6.50%,

7/15/27 

45‌

45‌

Targa

Resources

Partners,

6.875%,

1/15/29 

255‌

260‌

Thaioil

Treasury

Center,

3.625%,

1/23/23 

200‌

200‌

1,429‌

Finance

Companies

1.0%

AerCap

Ireland

Capital,

1.65%,

10/29/24 

215‌

198‌

Avolon

Holdings

Funding,

3.95%,

7/1/24  (1)

100‌

95‌

Navient,

6.125%,

3/25/24 

135‌

135‌

Navient,

7.25%,

9/25/23 

27‌

27‌

455‌

Financial

Other

0.8%

EMG

SUKUK,

4.564%,

6/18/24 

200‌

197‌

MAF

Global

Securities,

4.75%,

5/7/24 

200‌

197‌

394‌

Industrial

Other

0.4%

Bidvest

Group

U.K.,

3.625%,

9/23/26 

200‌

179‌

179‌

Insurance

1.4%

Athene

Global

Funding,

1.716%,

1/7/25  (1)

225‌

209‌

Brighthouse

Financial

Global

Funding,

1.00%,

4/12/24  (1)

25‌

23‌

CNO

Global

Funding,

1.65%,

1/6/25  (1)

150‌

139‌

Humana,

1.35%,

2/3/27 

70‌

60‌

Humana,

5.75%,

3/1/28 

25‌

26‌

Jackson

Financial,

1.125%,

11/22/23 

120‌

115‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

22

Par/Shares

$

Value

(Amounts

in

000s)

‡

UnitedHealth

Group,

5.15%,

10/15/25 

100‌

101‌

673‌

Owned

No

Guarantee

0.8%

Bank

Negara

Indonesia

Persero,

3.75%,

3/30/26 

200‌

182‌

Lamar

Funding,

3.958%,

5/7/25 

200‌

190‌

372‌

Real

Estate

Investment

Trusts

0.7%

Park

Intermediate

Holdings,

7.50%,

6/1/25  (1)

95‌

96‌

Service

Properties

Trust,

7.50%,

9/15/25 

175‌

169‌

Starwood

Property

Trust,

3.75%,

12/31/24  (1)

50‌

47‌

312‌

Technology

0.8%

CDW,

5.50%,

12/1/24 

55‌

54‌

Equifax,

5.10%,

12/15/27 

95‌

94‌

Microchip

Technology,

0.972%,

2/15/24 

125‌

118‌

Oracle,

5.80%,

11/10/25 

45‌

46‌

Skyworks

Solutions,

0.90%,

6/1/23 

20‌

20‌

VMware,

0.60%,

8/15/23 

70‌

68‌

400‌

Transportation

0.3%

Sydney

Airport

Finance,

3.90%,

3/22/23  (1)

150‌

149‌

149‌

Total

Corporate

Bonds

(Cost

$17,477)

16,611‌

FOREIGN

GOVERNMENT

OBLIGATIONS

&

MUNICIPALITIES

2.9%

Government

Sponsored

0.4%

MEGlobal

Canada

ULC,

5.00%,

5/18/25 

200‌

196‌

196‌

Owned

No

Guarantee

2.5%

Axiata,

4.357%,

3/24/26 

200‌

196‌

Ecopetrol,

5.875%,

9/18/23 

200‌

199‌

Export-Import

Bank

of

India,

3.875%,

3/12/24 

200‌

196‌

Indian

Oil,

4.75%,

1/16/24  (4)

200‌

198‌

Petroleos

Mexicanos,

4.875%,

1/18/24 

200‌

196‌

QNB

Finance,

2.625%,

5/12/25 

200‌

188‌

1,173‌

Total

Foreign

Government

Obligations

&

Municipalities

(Cost

$1,458)

1,369‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

23

Par/Shares

$

Value

(Amounts

in

000s)

‡

MUNICIPAL

SECURITIES

0.2%

Michigan

0.2%

Detroit,

Social

Bonds,

Series B,

GO,

2.189%,

4/1/24 

125‌

119‌

Total

Municipal

Securities

(Cost

$125)

119‌

NON-U.S.

GOVERNMENT

MORTGAGE-BACKED

SECURITIES

15.8%

Collateralized

Mortgage

Obligations

7.3%

Barclays

Mortgage

Loan

Trust

Series 2021-NQM1,

Class

A3,

CMO,

ARM

2.189%,

9/25/51  (1)

75‌

63‌

Bellemeade

Re

Series 2022-1,

Class

M1B,

CMO,

ARM

SOFR30A

+

2.15%,

5.671%,

1/26/32  (1)

300‌

284‌

CAFL

Issuer

Series 2021-RTL1,

Class

A2,

CMO,

STEP

3.104%,

3/28/29  (1)

220‌

195‌

COLT

Mortgage

Loan

Trust

Series 2020-3,

Class

A1,

CMO,

ARM

1.506%,

4/27/65  (1)

20‌

19‌

Connecticut

Avenue

Securities

Trust

Series 2021-R01,

Class

1M2,

CMO,

ARM

SOFR30A

+

1.55%,

5.071%,

10/25/41  (1)

200‌

192‌

Connecticut

Avenue

Securities

Trust

Series 2022-R03,

Class

1M1,

CMO,

ARM

SOFR30A

+

2.10%,

5.621%,

3/25/42  (1)

118‌

117‌

Connecticut

Avenue

Securities

Trust

Series 2022-R06,

Class

1M1,

CMO,

ARM

SOFR30A

+

2.75%,

6.271%,

5/25/42  (1)

79‌

79‌

Connecticut

Avenue

Securities

Trust

Series 2022-R08,

Class

1M1,

CMO,

ARM

SOFR30A

+

2.55%,

6.071%,

7/25/42  (1)

66‌

65‌

Deephaven

Residential

Mortgage

Trust

Series 2021-1,

Class

A3,

CMO,

ARM

1.128%,

5/25/65  (1)

31‌

27‌

Eagle

Series 2021-2,

Class

M1A,

CMO,

ARM

SOFR30A

+

1.55%,

5.097%,

4/25/34  (1)

150‌

149‌

Finance

of

America

HECM

Buyout

Series 2022-HB2,

Class

A1A,

CMO,

ARM

4.00%,

12/25/24  (1)

137‌

134‌

Flagstar

Mortgage

Trust

Series 2019-1INV,

Class

A11,

CMO,

ARM

1M

USD

LIBOR

+

0.95%,

4.536%,

10/25/49  (1)

19‌

18‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

24

Par/Shares

$

Value

(Amounts

in

000s)

‡

Flagstar

Mortgage

Trust

Series 2020-1INV,

Class

A11,

CMO,

ARM

1M

USD

LIBOR

+

0.85%,

4.436%,

3/25/50  (1)

31‌

29‌

Freddie

Mac

Whole

Loan

Securities

Trust

Series 2017-SC02,

Class

M1,

CMO,

ARM

3.858%,

5/25/47  (1)

249‌

242‌

FWD

Securitization

Trust

Series 2020-INV1,

Class

M1,

CMO,

ARM

2.85%,

1/25/50  (1)

250‌

192‌

Hundred

Acre

Wood

Trust

Series 2021-INV1,

Class

A9,

CMO,

ARM

2.50%,

7/25/51  (1)

127‌

109‌

Hundred

Acre

Wood

Trust

Series 2021-INV2,

Class

A27,

CMO,

ARM

2.50%,

10/25/51  (1)

88‌

70‌

JPMorgan

Mortgage

Trust

Series 2019-INV2,

Class

A3,

CMO,

ARM

3.50%,

2/25/50  (1)

91‌

83‌

MFRA

Trust

Series 2021-NQM2,

Class

A3,

CMO,

ARM

1.472%,

11/25/64  (1)

55‌

42‌

New

Residential

Mortgage

Loan

Trust

Series 2021-NQ1R,

Class

A3,

CMO,

ARM

1.198%,

7/25/55  (1)

64‌

51‌

OBX

Trust

Series 2019-INV1,

Class

A3,

CMO,

ARM

4.50%,

11/25/48  (1)

35‌

34‌

OBX

Trust

Series 2019-INV2,

Class

A25,

CMO,

ARM

4.00%,

5/27/49  (1)

49‌

46‌

OBX

Trust

Series 2021-NQM3,

Class

A2,

CMO,

ARM

1.26%,

7/25/61  (1)

75‌

55‌

Radnor

RE

Series 2021-2,

Class

M1A,

CMO,

ARM

SOFR30A

+

1.85%,

5.397%,

11/25/31  (1)

123‌

120‌

Starwood

Mortgage

Residential

Trust

Series 2020-INV1,

Class

A3,

CMO,

ARM

1.593%,

11/25/55  (1)

29‌

27‌

Starwood

Mortgage

Residential

Trust

Series 2021-2,

Class

A3,

CMO,

ARM

1.431%,

5/25/65  (1)

92‌

85‌

Structured

Agency

Credit

Risk

Debt

Notes

Series 2020-DNA2,

Class

M2,

CMO,

ARM

1M

USD

LIBOR

+

1.85%,

5.866%,

2/25/50  (1)

90‌

89‌

Structured

Agency

Credit

Risk

Debt

Notes

Series 2020-DNA5,

Class

M2,

CMO,

ARM

SOFR30A

+

2.80%,

6.321%,

10/25/50  (1)

61‌

61‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

25

Par/Shares

$

Value

(Amounts

in

000s)

‡

Structured

Agency

Credit

Risk

Debt

Notes

Series 2020-HQA1,

Class

M2,

CMO,

ARM

1M

USD

LIBOR

+

1.90%,

5.916%,

1/25/50  (1)

25‌

25‌

Structured

Agency

Credit

Risk

Debt

Notes

Series 2021-DNA5,

Class

M2,

CMO,

ARM

SOFR30A

+

1.65%,

5.171%,

1/25/34  (1)

83‌

81‌

Structured

Agency

Credit

Risk

Debt

Notes

Series 2022-DNA6,

Class

M1A,

CMO,

ARM

SOFR30A

+

2.15%,

5.671%,

9/25/42  (1)

51‌

51‌

Structured

Agency

Credit

Risk

Debt

Notes

Series 2022-HQA3,

Class

M1A,

CMO,

ARM

SOFR30A

+

2.30%,

5.821%,

8/25/42  (1)

58‌

57‌

Towd

Point

Mortgage

Trust

Series 2016-5,

Class

A1,

CMO,

ARM

2.50%,

10/25/56  (1)

29‌

29‌

UWM

Mortgage

Trust

Series 2021-INV2,

Class

A15,

CMO,

ARM

2.50%,

9/25/51  (1)

199‌

157‌

Verus

Securitization

Trust

Series 2019-4,

Class

A1,

CMO,

STEP

2.642%,

11/25/59  (1)

10‌

9‌

Verus

Securitization

Trust

Series 2019-INV3,

Class

A3,

CMO,

ARM

3.10%,

11/25/59  (1)

129‌

122‌

Verus

Securitization

Trust

Series 2020-1,

Class

A3,

CMO,

STEP

2.724%,

1/25/60  (1)

89‌

84‌

Verus

Securitization

Trust

Series 2021-2,

Class

A3,

CMO,

ARM

1.545%,

2/25/66  (1)

170‌

138‌

3,430‌

Commercial

Mortgage-Backed

Securities

8.5%

Alen

Mortgage

Trust

Series 2021-ACEN,

Class

C,

ARM

1M

USD

LIBOR

+

2.25%,

6.125%,

4/15/34  (1)

100‌

89‌

Arbor

Realty

Commercial

Real

Estate

Notes

Series 2021-FL3,

Class

A,

ARM

1M

USD

LIBOR

+

1.07%,

4.945%,

8/15/34  (1)

100‌

96‌

Arbor

Realty

Commercial

Real

Estate

Notes

Series 2021-FL4,

Class

A,

ARM

1M

USD

LIBOR

+

1.35%,

5.225%,

11/15/36  (1)

115‌

111‌

BAMLL

Commercial

Mortgage

Securities

Trust

Series 2021-JACX,

Class

E,

ARM

1M

USD

LIBOR

+

3.75%,

7.625%,

9/15/38  (1)

100‌

89‌

BANK

Series 2019-BN23,

Class

A1

1.975%,

12/15/52 

39‌

37‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

26

Par/Shares

$

Value

(Amounts

in

000s)

‡

BBCMS

Mortgage

Trust

Series 2020-BID,

Class

A,

ARM

1M

USD

LIBOR

+

2.14%,

6.015%,

10/15/37  (1)

250‌

242‌

BSPRT

Issuer

Series 2022-FL8,

Class

A,

ARM

SOFR30A

+

1.50%,

4.718%,

2/15/37  (1)

200‌

192‌

BX

Commercial

Mortgage

Trust

Series 2019-IMC,

Class

A,

ARM

1M

USD

LIBOR

+

1.00%,

4.873%,

4/15/34  (1)

160‌

156‌

BX

Commercial

Mortgage

Trust

Series 2019-IMC,

Class

D,

ARM

1M

USD

LIBOR

+

1.90%,

5.773%,

4/15/34  (1)

202‌

188‌

BX

Trust

Series 2021-ARIA,

Class

C,

ARM

1M

USD

LIBOR

+

1.646%,

5.521%,

10/15/36  (1)

160‌

148‌

CD

Mortgage

Trust

Series 2016-CD1,

Class

B,

ARM

3.077%,

8/10/49 

100‌

86‌

Citigroup

Commercial

Mortgage

Trust

Series 2013-375P,

Class

B,

ARM

3.635%,

5/10/35  (1)

150‌

140‌

Citigroup

Commercial

Mortgage

Trust

Series 2016-C1,

Class

AS

3.514%,

5/10/49 

200‌

183‌

Cold

Storage

Trust

Series 2020-ICE5,

Class

C,

ARM

1M

USD

LIBOR

+

1.65%,

5.525%,

11/15/37  (1)

147‌

142‌

Commercial

Mortgage

Trust

Series 2013-300P,

Class

A1

4.353%,

8/10/30  (1)

146‌

142‌

Commercial

Mortgage

Trust

Series 2014-CR14,

Class

AM,

ARM

4.526%,

2/10/47 

75‌

73‌

Commercial

Mortgage

Trust

Series 2014-UBS2,

Class

B

4.701%,

3/10/47 

105‌

101‌

Commercial

Mortgage

Trust

Series 2017-PANW,

Class

D,

ARM

4.343%,

10/10/29  (1)

109‌

99‌

Eleven

Madison

Mortgage

Trust

Series 2015-11MD,

Class

A,

ARM

3.673%,

9/10/35  (1)

170‌

157‌

Fontainebleau

Miami

Beach

Trust

Series 2019-FBLU,

Class

B

3.447%,

12/10/36  (1)

275‌

256‌

Great

Wolf

Trust

Series 2019-WOLF,

Class

E,

ARM

1M

USD

LIBOR

+

2.732%,

6.607%,

12/15/36  (1)

125‌

118‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

27

Par/Shares

$

Value

(Amounts

in

000s)

‡

GS

Mortgage

Securities

Trust

Series 2021-ROSS,

Class

C,

ARM

1M

USD

LIBOR

+

2.00%,

5.876%,

5/15/26  (1)

105‌

93‌

JPMorgan

Chase

Commercial

Mortgage

Securities

Trust

Series 2018-WPT,

Class

BFL,

ARM

1M

USD

LIBOR

+

1.50%,

5.347%,

7/5/33  (1)

59‌

54‌

JPMorgan

Chase

Commercial

Mortgage

Securities

Trust

Series 2020-609M,

Class

B,

ARM

1M

USD

LIBOR

+

1.77%,

5.646%,

10/15/33  (1)

100‌

94‌

LSTAR

Commercial

Mortgage

Trust

Series 2015-3,

Class

B,

ARM

3.291%,

4/20/48  (1)

147‌

137‌

MF1

Series 2021-FL7,

Class

A,

ARM

1M

USD

LIBOR

+

1.08%,

5.019%,

10/16/36  (1)

115‌

110‌

Morgan

Stanley

Bank

of

America

Merrill

Lynch

Trust

Series 2013-C7,

Class

AS

3.214%,

2/15/46 

90‌

90‌

Morgan

Stanley

Bank

of

America

Merrill

Lynch

Trust

Series 2014-C17,

Class

A5

3.741%,

8/15/47 

39‌

38‌

Morgan

Stanley

Bank

of

America

Merrill

Lynch

Trust

Series 2015-C24,

Class

AS,

ARM

4.036%,

5/15/48 

95‌

89‌

One

Market

Plaza

Trust

Series 2017-1MKT,

Class

A

3.614%,

2/10/32  (1)

130‌

125‌

Shelter

Growth

CRE

Issuer

Series 2021-FL3,

Class

A,

ARM

1M

USD

LIBOR

+

1.08%,

4.955%,

9/15/36  (1)

67‌

65‌

SLIDE

Series 2018-FUN,

Class

D,

ARM

1M

USD

LIBOR

+

2.10%,

5.975%,

6/15/31  (1)

228‌

221‌

3,961‌

Total

Non-U.S.

Government

Mortgage-Backed

Securities

(Cost

$8,051)

7,391‌

U.S.

GOVERNMENT

&

AGENCY

MORTGAGE-BACKED

SECURITIES

1.5%

U.S

Government

Obligation

1.5%

Government

National

Mortgage

Assn. 

3.50%,

5/20/47

-

11/20/47 

495‌

466‌

4.50%,

6/20/51 

234‌

232‌

Total

U.S.

Government

&

Agency

Mortgage-Backed

Securities

(Cost

$679)

698‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

28

Par/Shares

$

Value

(Amounts

in

000s)

‡

U.S.

GOVERNMENT

AGENCY

OBLIGATIONS

(EXCLUDING

MORTGAGE-BACKED)

20.5%

U.S.

Treasury

Obligations

20.5%

U.S.

Treasury

Notes,

2.50%,

4/30/24 

735‌

714‌

U.S.

Treasury

Notes,

3.00%,

6/30/24 

1,000‌

976‌

U.S.

Treasury

Notes,

3.00%,

7/31/24 

2,165‌

2,113‌

U.S.

Treasury

Notes,

3.00%,

7/15/25  (5)

3,225‌

3,132‌

U.S.

Treasury

Notes,

4.25%,

9/30/24 

1,930‌

1,924‌

U.S.

Treasury

Notes,

4.375%,

10/31/24 

760‌

760‌

Total

U.S.

Government

Agency

Obligations

(Excluding

Mortgage-Backed)

(Cost

$9,808)

9,619‌

SHORT-TERM

INVESTMENTS

5.3%

Commercial

Paper

3.8%

4(2)

2.7%(6)

Crown

Castle

International,

5.085%,

1/17/23 

250‌

248‌

Enel

Finance

America,

3.299%,

1/3/23 

250‌

249‌

Harley

Davidson,

4.66%,

12/5/22 

250‌

250‌

International

Flavors

&

Fragrances,

2.10%,

12/21/22 

250‌

249‌

Targa

Resources,

4.868%,

12/16/22 

250‌

250‌

1,246‌

Non-4(2)

1.1%

Ovintiv,

4.863%,

12/19/22 

250‌

250‌

Quanta

Services,

4.712%,

12/6/22 

250‌

250‌

500‌

1,746‌

Money

Market

Funds

1.5%

T.

Rowe

Price

Government

Reserve

Fund,

3.86%  (7)(8)

720‌

720‌

720‌

Total

Short-Term

Investments

(Cost

$2,465)

2,466‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

29

Par/Shares

$

Value

(Amounts

in

000s)

‡

SECURITIES

LENDING

COLLATERAL

0.4%

INVESTMENTS

IN

A

POOLED

ACCOUNT

THROUGH

SECURITIES

LENDING

PROGRAM

WITH

JPMORGAN

CHASE

BANK

0.4%

Money

Market

Funds

0.4%

T.

Rowe

Price

Government

Reserve

Fund,

3.86%  (7)(8)

185‌

185‌

Total

Investments

in

a

Pooled

Account

through

Securities

Lending

Program

with

JPMorgan

Chase

Bank

185‌

Total

Securities

Lending

Collateral

(Cost

$185)

185‌

Total

Investments

in

Securities

100.5%

of

Net

Assets

(Cost

$49,334)

$

47,090‌

‡

Par/Shares

and

Notional

Amount

are

denominated

in

U.S.

dollars

unless

otherwise

noted.

(1)

Security

was

purchased

pursuant

to

Rule

144A

under

the

Securities

Act

of

1933

and

may

be

resold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers.

Total

value

of

such

securities

at

period-end

amounts

to

$18,907

and

represents

40.4%

of

net

assets.

(2)

Bank

loan

positions

may

involve

multiple

underlying

tranches.

In

those

instances,

the

position

presented

reflects

the

aggregate

of

those

respective

underlying

tranches

and

the

rate

presented

reflects

the

weighted

average

rate

of

the

settled

positions.

(3)

Security

is

a

fix-to-float

security,

which

carries

a

fixed

coupon

until

a

certain

date,

upon

which

it

switches

to

a

floating

rate.

Reference

rate

and

spread

are

provided

if

the

rate

is

currently

floating.

(4)

See

Note

4

.

All

or

a

portion

of

this

security

is

on

loan

at

November

30,

2022.

(5)

At

November

30,

2022,

all

or

a

portion

of

this

security

is

pledged

as

collateral

and/or

margin

deposit

to

cover

future

funding

obligations.

(6)

Commercial

paper

exempt

from

registration

under

Section

4(2)

of

the

Securities

Act

of

1933

and

may

be

resold

in

transactions

exempt

from

registration

only

to

dealers

in

that

program

or

other

"accredited

investors".

Total

value

of

such

securities

at

period-end

amounts

to

$1,246

and

represents

2.7%

of

net

assets.

(7)

Seven-day

yield

(8)

Affiliated

Companies

1M

USD

LIBOR

One

month

USD

LIBOR

(London

interbank

offered

rate)

3M

USD

LIBOR

Three

month

USD

LIBOR

(London

interbank

offered

rate)

ARM

Adjustable

Rate

Mortgage

(ARM);

rate

shown

is

effective

rate

at

period-end.

The

rates

for

certain

ARMs

are

not

based

on

a

published

reference

rate

and

spread

but

may

be

determined

using

a

formula

based

on

the

rates

of

the

underlying

loans. 

T.

ROWE

PRICE

Short

Duration

Income

Fund

30

.

.

.

.

.

.

.

.

.

.

CLO

Collateralized

Loan

Obligation

CMO

Collateralized

Mortgage

Obligation

FRN

Floating

Rate

Note

GO

General

Obligation

SOFR30A

30-day

Average

SOFR

(Secured

overnight

financing

rate)

STEP

Stepped

coupon

bond

for

which

the

coupon

rate

of

interest

adjusts

on

specified

date(s);

rate

shown

is

effective

rate

at

period-end.

VR

Variable

Rate;

rate

shown

is

effective

rate

at

period-end.

The

rates

for

certain

variable

rate

securities

are

not

based

on

a

published

reference

rate

and

spread

but

are

determined

by

the

issuer

or

agent

and

based

on

current

market

conditions.

T.

ROWE

PRICE

Short

Duration

Income

Fund

31

(Amounts

in

000s)

SWAPS

0.2%

Description

Notional

Amount

$

Value

Upfront

Payments/

$

(Receipts)

Unrealized

$

Gain/(Loss)

BILATERAL

SWAPS

0.2%

Credit

Default

Swaps,

Protection

Bought

0.2%

Goldman

Sachs,

Protection

Bought

(Relevant

Credit:

Markit

CMBX.

NA.BBB-S10,

40

Year

Index),

Pay

3.00%

Monthly,

Receive

upon

credit

default,

12/16/72

585

111

120

(9)

Total

Bilateral

Credit

Default

Swaps,

Protection

Bought

120

(9)

Credit

Default

Swaps,

Protection

Sold

0.0%

Barclays

Bank,

Protection

Sold

(Relevant

Credit:

AT&T,

Baa2*),

Receive

1.00%

Quarterly,

Pay

upon

credit

default,

6/20/23

250

1

1

—

Total

Bilateral

Credit

Default

Swaps,

Protection

Sold

1

—

Total

Bilateral

Swaps

121

(9)

Description

Notional

Amount

$

Value

Initial

$

Value

**

Unrealized

$

Gain/(Loss)

CENTRALLY

CLEARED

SWAPS

(0.0)%

Credit

Default

Swaps,

Protection

Bought

(0.0)%

Protection

Bought

(Relevant

Credit:

Markit

CDX.NA.HY-S39,

5

Year

Index),

Pay

5.00%

Quarterly,

Receive

upon

credit

default,

12/20/27

480

(14)

(12)

(2)

Total

Centrally

Cleared

Credit

Default

Swaps,

Protection

Bought

(2)

T.

ROWE

PRICE

Short

Duration

Income

Fund

32

(Amounts

in

000s)

Description

Notional

Amount

$

Value

Initial

$

Value**

Unrealized

$

Gain/(Loss)

Credit

Default

Swaps,

Protection

Sold

0.0%

Protection

Sold

(Relevant

Credit:

Markit

CDX.NA.IG-S39,

5

Year

Index),

Receive

1.00%

Quarterly,

Pay

upon

credit

default,

12/20/27

690

9

7

2

Total

Centrally

Cleared

Credit

Default

Swaps,

Protection

Sold

2

Total

Centrally

Cleared

Swaps

—

Net

payments

(receipts)

of

variation

margin

to

date

(4)

Variation

margin

receivable

(payable)

on

centrally

cleared

swaps

$

(4)

*

Credit

ratings

as

of

November

30,

2022.

Ratings

shown

are

from

Moody’s

Investors

Service

and

if

Moody’s

does

not

rate

a

security,

then

Standard

&

Poor’s

(S&P)

is

used.

Fitch

is

used

for

securities

that

are

not

rated

by

either

Moody’s

or

S&P.

**

Includes

interest

purchased

or

sold

but

not

yet

collected

of

$(3).

T.

ROWE

PRICE

Short

Duration

Income

Fund

33

FUTURES

CONTRACTS

($000s)

Expiration

Date

Notional

Amount

Value

and

Unrealized

Gain

(Loss)

Short,

5

U.S.

Treasury

Notes

five

year

contracts

3/23

(543)

$

(3‌)

Short,

4

U.S.

Treasury

Notes

ten

year

contracts

3/23

(454)

(4‌)

Long,

48

U.S.

Treasury

Notes

two

year

contracts

3/23

9,857

26‌

Short,

1

U.S.

Ultra

Treasury

Notes

ten

year

contracts

3/23

(120)

(1‌)

Net

payments

(receipts)

of

variation

margin

to

date

(3‌)

Variation

margin

receivable

(payable)

on

open

futures

contracts

$

15‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

34

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

AFFILIATED

COMPANIES

($000s)

The

fund

may

invest

in

certain

securities

that

are

considered

affiliated

companies.

As

defined

by

the

1940

Act,

an

affiliated

company

is

one

in

which

the

fund

owns

5%

or

more

of

the

outstanding

voting

securities,

or

a

company

that

is

under

common

ownership

or

control.

The

following

securities

were

considered

affiliated

companies

for

all

or

some

portion

of

the

six

months

ended

November

30,

2022.

Net

realized

gain

(loss),

investment

income,

change

in

net

unrealized

gain/loss,

and

purchase

and

sales

cost

reflect

all

activity

for

the

period

then

ended.

Affiliate

Net

Realized

Gain

(Loss)

Change

in

Net

Unrealized

Gain/Loss

Investment

Income

T.

Rowe

Price

Government

Reserve

Fund,

3.86%

$

—‌

$

—‌

$

12‌++

Totals

$

—‌#

$

—‌

$

12‌+

Supplementary

Investment

Schedule

Affiliate

Value

05/31/22

Purchase

Cost

Sales

Cost

Value

11/30/22

T.

Rowe

Price

Government

Reserve

Fund,

3.86%

$

942‌

 ¤

  ¤

$

905‌

Total

$

905‌^

#

Capital

gain

distributions

from

underlying

Price

funds

represented

$0

of

the

net

realized

gain

(loss).

++

Excludes

earnings

on

securities

lending

collateral,

which

are

subject

to

rebates

and

fees

as

described

in

Note

4

.

+

Investment

income

comprised

$12

of

dividend

income

and

$0

of

interest

income.

¤

Purchase

and

sale

information

not

shown

for

cash

management

funds.

^

The

cost

basis

of

investments

in

affiliated

companies

was

$905.

T.

ROWE

PRICE

Short

Duration

Income

Fund

November

30,

2022

(Unaudited)

Statement

of

Assets

and

Liabilities

35

($000s,

except

shares

and

per

share

amounts)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Assets

Investments

in

securities,

at

value

(cost

$49,334)

$

47,090‌

Interest

receivable

321‌

Cash

236‌

Bilateral

swap

premiums

paid

121‌

Receivable

for

shares

sold

59‌

Due

from

affiliates

16‌

Variation

margin

receivable

on

futures

contracts

15‌

Other

assets

45‌

Total

assets

47,903‌

Liabilities

Payable

for

investment

securities

purchased

638‌

Obligation

to

return

securities

lending

collateral

185‌

Investment

management

fees

payable

11‌

Unrealized

loss

on

bilateral

swaps

9‌

Variation

margin

payable

on

centrally

cleared

swaps

4‌

Payable

for

shares

redeemed

3‌

Other

liabilities

210‌

Total

liabilities

1,060‌

NET

ASSETS

$

46,843‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

November

30,

2022

(Unaudited)

Statement

of

Assets

and

Liabilities

36

($000s,

except

shares

and

per

share

amounts)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Net

Assets

Consist

of:

Total

distributable

earnings

(loss)

$

(4,416‌)

Paid-in

capital

applicable

to

5,102,779

shares

of

$0.01

par

value

capital

stock

outstanding;

6,000,000,000

shares

authorized

51,259‌

NET

ASSETS

$

46,843‌

NET

ASSET

VALUE

PER

SHARE

Investor

Class

($29,197,966

/

3,180,242

shares

outstanding)

$

9.18‌

I

Class

($17,644,953

/

1,922,537

shares

outstanding)

$

9.18‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

(Unaudited)

Statement

of

Operations

37

($000s)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

6

Months

Ended

11/30/22

Investment

Income

(Loss)

Income

    Interest

$

736‌

Dividend

12‌

Total

income

748‌

Expenses

Investment

management

68‌

Shareholder

servicing

Investor

Class

$

13‌

I

Class

4‌

17‌

Prospectus

and

shareholder

reports

Investor

Class

12‌

I

Class

2‌

14‌

Custody

and

accounting

94‌

Registration

26‌

Legal

and

audit

19‌

Miscellaneous

7‌

Waived

/

paid

by

Price

Associates

(159‌)

Total

expenses

86‌

Net

investment

income

662‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

(Unaudited)

Statement

of

Operations

38

($000s)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

6

Months

Ended

11/30/22

Realized

and

Unrealized

Gain

/

Loss

–

Net

realized

gain

(loss)

Securities

(901‌)

Futures

(349‌)

Swaps

(51‌)

Net

realized

loss

(1,301‌)

Change

in

net

unrealized

gain

/

loss

Securities

(407‌)

Futures

26‌

Swaps

(9‌)

Change

in

net

unrealized

gain

/

loss

(390‌)

Net

realized

and

unrealized

gain

/

loss

(1,691‌)

DECREASE

IN

NET

ASSETS

FROM

OPERATIONS

$

(1,029‌)

T.

ROWE

PRICE

Short

Duration

Income

Fund

(Unaudited)

Statement

of

Changes

in

Net

Assets

39

($000s)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

6

Months

Ended

11/30/22

Year

Ended

5/31/22

Increase

(Decrease)

in

Net

Assets

Operations

Net

investment

income

$

662‌

$

901‌

Net

realized

loss

(1,301‌)

(897‌)

Change

in

net

unrealized

gain

/

loss

(390‌)

(1,949‌)

Decrease

in

net

assets

from

operations

(1,029‌)

(1,945‌)

Distributions

to

shareholders

Net

earnings

Investor

Class

(409‌)

(824‌)

I

Class

(240‌)

(120‌)

Decrease

in

net

assets

from

distributions

(649‌)

(944‌)

Capital

share

transactions

*

Shares

sold

Investor

Class

4,384‌

27,835‌

I

Class

5,350‌

23,019‌

Distributions

reinvested

Investor

Class

154‌

419‌

I

Class

197‌

99‌

Shares

redeemed

Investor

Class

(5,364‌)

(37,684‌)

I

Class

(4,550‌)

(5,612‌)

Increase

in

net

assets

from

capital

share

transactions

171‌

8,076‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

(Unaudited)

Statement

of

Changes

in

Net

Assets

40

($000s)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

6

Months

Ended

11/30/22

Year

Ended

5/31/22

Net

Assets

Increase

(decrease)

during

period

(1,507‌)

5,187‌

Beginning

of

period

48,350‌

43,163‌

End

of

period

$

46,843‌

$

48,350‌

*Share

information

(000s)

Shares

sold

Investor

Class

472‌

2,797‌

I

Class

579‌

2,362‌

Distributions

reinvested

Investor

Class

17‌

42‌

I

Class

21‌

10‌

Shares

redeemed

Investor

Class

(579‌)

(3,837‌)

I

Class

(491‌)

(583‌)

Increase

in

shares

outstanding

19‌

791‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

Unaudited

NOTES

TO

FINANCIAL

STATEMENTS

41

T.

Rowe

Price

Short-Term

Bond

Fund,

Inc.

(the

corporation) is

registered

under

the

Investment

Company

Act

of

1940

(the

1940

Act).

The

Short

Duration

Income

Fund

(the

fund)

is a

diversified,

open-end

management

investment

company

established

by

the

corporation. The

fund

seeks

to

provide

income

consistent

with

limited

fluctuation

in

principal

value

and

liquidity.

The

fund

has

two classes

of

shares:

the

Short

Duration

Income

Fund

(Investor

Class)

and

the

Short

Duration

Income

Fund–I

Class

(I

Class).

I

Class

shares

require

a

$500,000

initial

investment

minimum,

although

the

minimum

generally

is

waived

or

reduced

for

financial

intermediaries,

eligible

retirement

plans,

and

certain

other

accounts.

Prior

to

November

15,

2021,

the

initial

investment

minimum

was

$1

million

and

was

generally

waived

for

financial

intermediaries,

eligible

retirement

plans,

and

other

certain

accounts.

As

a

result

of

the

reduction

in

the

I

Class

minimum,

certain

assets

transferred

from

the

Investor

Class

to

the

I

Class.

This

transfer

of

shares

from

Investor

Class

to

I

Class

is

reflected

in

the

Statement

of

Changes

in

Net

Assets

within

the

Capital

shares

transactions

as

Shares

redeemed

and

Shares

sold,

respectively. Each

class

has

exclusive

voting

rights

on

matters

related

solely

to

that

class;

separate

voting

rights

on

matters

that

relate

to

both

classes;

and,

in

all

other

respects,

the

same

rights

and

obligations

as

the

other

class.

NOTE

1

-

SIGNIFICANT

ACCOUNTING

POLICIES 

Basis

of

Preparation

 The fund

is

an

investment

company

and

follows

accounting

and

reporting

guidance

in

the

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standards

Codification

Topic

946

(ASC

946).

The

accompanying

financial

statements

were

prepared

in

accordance

with

accounting

principles

generally

accepted

in

the

United

States

of

America

(GAAP),

including,

but

not

limited

to,

ASC

946.

GAAP

requires

the

use

of

estimates

made

by

management.

Management

believes

that

estimates

and

valuations

are

appropriate;

however,

actual

results

may

differ

from

those

estimates,

and

the

valuations

reflected

in

the

accompanying

financial

statements

may

differ

from

the

value

ultimately

realized

upon

sale

or

maturity.

Investment

Transactions,

Investment

Income,

and

Distributions

Investment

transactions

are

accounted

for

on

the

trade

date

basis.

Income

and

expenses

are

recorded

on

the

accrual

basis.

Realized

gains

and

losses

are

reported

on

the

identified

cost

basis.

Premiums

and

discounts

on

debt

securities

are

amortized

for

financial

reporting

purposes.

Paydown

gains

and

losses

are

recorded

as

an

adjustment

to

interest

income.

Inflation

adjustments

to

the

principal

amount

of

inflation-indexed

bonds

are

reflected

as

interest

income.

Income

tax-related

interest

and

penalties,

if

incurred,

are

T.

ROWE

PRICE

Short

Duration

Income

Fund

42

recorded

as

income

tax

expense.

Dividends

received

from

mutual

fund

investments

are

reflected

as

dividend

income;

capital

gain

distributions

are

reflected

as

realized

gain/

loss.

Dividend

income

and

capital

gain

distributions

are

recorded

on

the

ex-dividend

date.

Non-cash

dividends,

if

any,

are

recorded

at

the

fair

market

value

of

the

asset

received.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Income

distributions,

if

any, are

declared

by

each

class daily

and

paid

monthly.

A

capital

gain

distribution,

if

any, may

also

be

declared

and

paid

by

the

fund

annually.

Class

Accounting

 Shareholder

servicing,

prospectus,

and

shareholder

report

expenses

incurred

by

each

class

are

charged

directly

to

the

class

to

which

they

relate.

Expenses

common

to all classes

and

investment

income

are

allocated

to

the

classes

based

upon

the

relative

daily

net

assets

of

each

class’s

settled

shares;

realized

and

unrealized

gains

and

losses

are

allocated

based

upon

the

relative

daily

net

assets

of

each

class’s

outstanding

shares.

Capital

Transactions

 Each

investor’s

interest

in

the

net

assets

of the

fund

is

represented

by

fund

shares. The

fund’s

net

asset

value

(NAV)

per

share

is

computed

at

the

close

of

the

New

York

Stock

Exchange

(NYSE),

normally

4

p.m.

ET,

each

day

the

NYSE

is

open

for

business.

However,

the

NAV

per

share

may

be

calculated

at

a

time

other

than

the

normal

close

of

the

NYSE

if

trading

on

the

NYSE

is

restricted,

if

the

NYSE

closes

earlier,

or

as

may

be

permitted

by

the

SEC.

Purchases

and

redemptions

of

fund

shares

are

transacted

at

the

next-computed

NAV

per

share,

after

receipt

of

the

transaction

order

by

T.

Rowe

Price

Associates,

Inc.,

or

its

agents.

New

Accounting

Guidance

The

FASB

issued

Accounting

Standards

Update

(ASU),

ASU

2020–04,

Reference

Rate

Reform

(Topic

848) –

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting

in

March

2020

and

ASU

2021-01

in

January

2021

which

provided

further

amendments

and

clarifications

to

Topic

848.

These

ASUs provide

optional,

temporary

relief

with

respect

to

the

financial

reporting

of

contracts

subject

to

certain

types

of

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR),

and

other

interbank-offered

based

reference

rates,

through December

31,

2022.

Management

intends

to

rely

upon

the

relief

provided

under

Topic

848,

which

is

not

expected to

have

a

material

impact

on

the fund's

financial  statements.

Indemnification

 In

the

normal

course

of

business, the

fund

may

provide

indemnification

in

connection

with

its

officers

and

directors,

service

providers,

and/or

private

company

investments. The

fund’s

maximum

exposure

under

these

arrangements

is

unknown;

however,

the

risk

of

material

loss

is

currently

considered

to

be

remote.

T.

ROWE

PRICE

Short

Duration

Income

Fund

43

NOTE

2

-

VALUATION 

Fair

Value

  The

fund’s

financial

instruments

are

valued

at

the

close

of

the

NYSE

and

are

reported

at

fair

value,

which

GAAP

defines

as

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

at

the

measurement

date. The fund’s

Board

of

Directors

(the

Board)

has

designated

T.

Rowe

Price

Associates,

Inc.

as

the

fund’s

valuation

designee

(Valuation

Designee).

Subject

to

oversight

by

the

Board,

the

Valuation

Designee

performs

the

following

functions

in

performing

fair

value

determinations:

assesses

and

manages

valuation

risks;

establishes

and

applies

fair

value

methodologies;

tests

fair

value

methodologies;

and

evaluates

pricing

vendors

and

pricing

agents.

The

duties

and

responsibilities

of

the

Valuation

Designee

are

performed

by

its

Valuation

Committee. The

Valuation

Designee provides

periodic

reporting

to

the

Board

on

valuation

matters.

Various

valuation

techniques

and

inputs

are

used

to

determine

the

fair

value

of

financial

instruments.

GAAP

establishes

the

following

fair

value

hierarchy

that

categorizes

the

inputs

used

to

measure

fair

value:

Level

1

–

quoted

prices

(unadjusted)

in

active

markets

for

identical

financial

instruments

that

the

fund

can

access

at

the

reporting

date

Level

2

–

inputs

other

than

Level

1

quoted

prices

that

are

observable,

either

directly

or

indirectly

(including,

but

not

limited

to,

quoted

prices

for

similar

financial

instruments

in

active

markets,

quoted

prices

for

identical

or

similar

financial

instruments

in

inactive

markets,

interest

rates

and

yield

curves,

implied

volatilities,

and

credit

spreads)

Level

3

–

unobservable

inputs

(including

the Valuation

Designee’s assumptions

in

determining

fair

value)

Observable

inputs

are

developed

using

market

data,

such

as

publicly

available

information

about

actual

events

or

transactions,

and

reflect

the

assumptions

that

market

participants

would

use

to

price

the

financial

instrument.

Unobservable

inputs

are

those

for

which

market

data

are

not

available

and

are

developed

using

the

best

information

available

about

the

assumptions

that

market

participants

would

use

to

price

the

financial

instrument.

GAAP

requires

valuation

techniques

to

maximize

the

use

of

relevant

observable

inputs

and

minimize

the

use

of

unobservable

inputs.

When

multiple

inputs

are

used

to

derive

fair

value,

the

financial

instrument

is

assigned

to

the

level

within

the

fair

value

hierarchy

based

on

the

lowest-level

input

that

is

significant

to

the

fair

value

of

the

financial

instrument.

Input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level

but

rather

the

degree

of

judgment

used

in

determining

those

values.

T.

ROWE

PRICE

Short

Duration

Income

Fund

44

Valuation

Techniques 

Debt

securities

generally

are

traded

in

the over-the-counter

(OTC)

market

and

are

valued

at

prices

furnished

by

independent

pricing

services

or

by

broker

dealers

who

make

markets

in

such

securities.

When

valuing

securities,

the

independent

pricing

services

consider

the

yield

or

price

of

bonds

of

comparable

quality,

coupon,

maturity,

and

type,

as

well

as

prices

quoted

by

dealers

who

make

markets

in

such

securities.   

Investments

in

mutual

funds

are

valued

at

the

mutual

fund’s

closing

NAV

per

share

on

the

day

of

valuation.

Futures

contracts

are

valued

at

closing

settlement

prices.

Swaps

are

valued

at

prices

furnished

by

an

independent

pricing

service

or

independent

swap

dealers.

Assets

and

liabilities

other

than

financial

instruments,

including

short-term

receivables

and

payables,

are

carried

at

cost,

or

estimated

realizable

value,

if

less,

which

approximates

fair

value. 

Investments

for

which

market

quotations are

not

readily

available

or

deemed

unreliable

are

valued

at

fair

value

as

determined

in

good

faith

by

the

Valuation

Designee.

The

Valuation

Designee

has

adopted

methodologies

for

determining

the

fair

value

of

investments

for

which

market

quotations

are

not

readily

available

or

deemed

unreliable,

including

the

use

of

other

pricing

sources.

Factors

used

in

determining

fair

value

vary

by

type

of

investment

and

may

include

market

or

investment

specific

considerations.

The

Valuation

Designee typically

will

afford

greatest

weight

to

actual

prices

in

arm’s

length

transactions,

to

the

extent

they

represent

orderly

transactions

between

market

participants,

transaction

information

can

be

reliably

obtained,

and

prices

are

deemed

representative

of

fair

value.

However,

the

Valuation

Designee may

also

consider

other

valuation

methods

such

as

market-based

valuation

multiples;

a

discount

or

premium

from

market

value

of

a

similar,

freely

traded

security

of

the

same

issuer;

discounted

cash

flows;

yield

to

maturity;

or

some

combination.

Fair

value

determinations

are

reviewed

on

a

regular

basis.

Because

any

fair

value

determination

involves

a

significant

amount

of

judgment,

there

is

a

degree

of

subjectivity

inherent

in

such

pricing

decisions. Fair

value

prices

determined

by

the

Valuation

Designee could

differ

from

those

of

other

market

participants,

and

it

is

possible

that

the

fair

value

determined

for

a

security

may

be

materially

different

from

the

value

that

could

be

realized

upon

the

sale

of

that

security.

T.

ROWE

PRICE

Short

Duration

Income

Fund

45

Valuation

Inputs

  The

following

table

summarizes

the

fund’s

financial

instruments,

based

on

the

inputs

used

to

determine

their

fair

values

on

November

30,

2022

(for

further

detail

by

category,

please

refer

to

the

accompanying

Portfolio

of

Investments):

NOTE

3

-

DERIVATIVE

INSTRUMENTS 

During

the

six

months ended

November

30,

2022,

the

fund

invested

in

derivative

instruments.

As

defined

by

GAAP,

a

derivative

is

a

financial

instrument

whose

value

is

derived

from

an

underlying

security

price,

foreign

exchange

rate,

interest

rate,

index

of

prices

or

rates,

or

other

variable;

it

requires

little

or

no

initial

investment

and

permits

or

requires

net

settlement.

The

fund

invests

in

derivatives

only

if

the

expected

risks

and

rewards

are

consistent

with

its

investment

objectives,

policies,

and

overall

risk

profile,

as

described

in

its

prospectus

and

Statement

of

Additional

Information.

The

fund

may

($000s)

Level

1

Level

2

Level

3

Total

Value

Assets

Fixed

Income

Securities

1

$

—‌

$

44,439‌

$

—‌

$

44,439‌

Short-Term

Investments

720‌

1,746‌

—‌

2,466‌

Securities

Lending

Collateral

185‌

—‌

—‌

185‌

Total

Securities

905‌

46,185‌

—‌

47,090‌

Swaps*

—‌

114‌

—‌

114‌

Futures

Contracts*

26‌

—‌

—‌

26‌

Total

$

931‌

$

46,299‌

$

—‌

$

47,230‌

Liabilities

Swaps*

$

—‌

$

2‌

$

—‌

$

2‌

Futures

Contracts*

8‌

—‌

—‌

8‌

Total

$

8‌

$

2‌

$

—‌

$

10‌

1

Includes

Asset-Backed

Securities,

Bank

Loans,

Corporate

Bonds,

Foreign

Government

Obligations

&

Municipalities,

Municipal

Securities,

Non-U.S.

Government

Mortgage-Backed

Securities,

U.S.

Government

&

Agency

Mortgage-Backed

Securities

and

U.S.

Government

Agency

Obligations

(Excluding

Mortgage-Backed).

*

The

fair

value

presented

includes

cumulative

gain

(loss)

on

open

futures

contracts

and

centrally

cleared

swaps;

however,

the

net

value

reflected

on

the

accompanying

Portfolio

of

Investments

is

only

the

unsettled

variation

margin

receivable

(payable)

at

that

date.

T.

ROWE

PRICE

Short

Duration

Income

Fund

46

use

derivatives

for

a

variety

of

purposes

and

may

use

them

to

establish

both

long

and

short

positions

within

the

fund’s

portfolio.

Potential

uses

include

to

hedge

against

declines

in

principal

value,

increase

yield,

invest

in

an

asset

with

greater

efficiency

and

at

a

lower

cost

than

is

possible

through

direct

investment,

to

enhance

return,

or

to

adjust

portfolio

duration

and

credit

exposure.

The

risks

associated

with

the

use

of

derivatives

are

different

from,

and

potentially

much

greater

than,

the

risks

associated

with

investing

directly

in

the

instruments

on

which

the

derivatives

are

based.

The

fund

values

its

derivatives

at

fair

value

and

recognizes

changes

in

fair

value

currently

in

its

results

of

operations.

Accordingly,

the

fund

does

not

follow

hedge

accounting,

even

for

derivatives

employed

as

economic

hedges.

Generally,

the

fund

accounts

for

its

derivatives

on

a

gross

basis.

It

does

not

offset

the

fair

value

of

derivative

liabilities

against

the

fair

value

of

derivative

assets

on

its

financial

statements,

nor

does

it

offset

the

fair

value

of

derivative

instruments

against

the

right

to

reclaim

or

obligation

to

return

collateral.

The

following

table

summarizes

the

fair

value

of

the

fund’s

derivative

instruments

held

as

of

November

30,

2022,

and

the

related

location

on

the

accompanying

Statement

of

Assets

and

Liabilities,

presented

by

primary

underlying

risk

exposure:

($000s)

Location

on

Statement

of

Assets

and

Liabilities

Fair

Value*

Assets

Interest

rate

derivatives

Futures

$

26‌

Credit

derivatives

Bilateral

Swaps

and

Premiums

,

Centrally

Cleared

Swaps

114‌

*

Total

$

140‌

*

Liabilities

Interest

rate

derivatives

Futures

$

8‌

Credit

derivatives

Centrally

Cleared

Swaps

2‌

Total

$

10‌

*

The

fair

value

presented

includes

cumulative

gain

(loss)

on

open

futures

contracts

and

centrally

cleared

swaps;

however,

the

value

reflected

on

the

accompanying

Statement

of

Assets

and

Liabilities

is

only

the

unsettled

variation

margin

receivable

(payable)

at

that

date.

T.

ROWE

PRICE

Short

Duration

Income

Fund

47

Additionally,

the

amount

of

gains

and

losses

on

derivative

instruments

recognized

in

fund

earnings

during

the

six

months ended

November

30,

2022,

and

the

related

location

on

the

accompanying

Statement

of

Operations

is

summarized

in

the

following

table

by

primary

underlying

risk

exposure: 

Counterparty

Risk

and

Collateral

 The

fund

invests

in

derivatives

in

various

markets,

which

expose

it

to

differing

levels

of

counterparty

risk.

Counterparty

risk

on

exchange-

traded

and

centrally

cleared

derivative

contracts,

such

as

futures,

exchange-traded

options,

and

centrally

cleared

swaps,

is

minimal

because

the

clearinghouse

provides

protection

against

counterparty

defaults.

For

futures

and

centrally

cleared

swaps,

the

fund

is

required

to

deposit

collateral

in

an

amount

specified

by

the

clearinghouse

and

the

clearing

firm

(margin

requirement),

and

the

margin

requirement

must

be

maintained

over

the

life

of

the

contract.

Each

clearinghouse

and

clearing

firm,

in

its

sole

discretion,

may

adjust

the

margin

requirements

applicable

to

the

fund.

Derivatives,

such

as

bilateral

swaps,

forward

currency

exchange

contracts,

and

OTC

options,

that

are

transacted

and

settle

directly

with

a

counterparty

(bilateral

derivatives)

may

expose

the

fund

to

greater

counterparty

risk.

To

mitigate

this

risk,

the

fund

has

entered

into

master

netting

arrangements

(MNAs)

with

certain

counterparties

that

permit

net

settlement

under

specified

conditions

and,

for

certain

counterparties,

also

($000s)                                               

Location

of

Gain

(Loss)

on

Statement

of

Operations

Futures

Swaps

Total

Realized

Gain

(Loss)

Interest

rate

derivatives

$

(349‌)

$

—‌

$

(349‌)

Credit

derivatives

—‌

(51‌)

(51‌)

Total

$

(349‌)

$

(51‌)

$

(400‌)

Change

in

Unrealized

Gain

(Loss)

Interest

rate

derivatives

$

26‌

$

—‌

$

26‌

Credit

derivatives

—‌

(9‌)

(9‌)

Total

$

26‌

$

(9‌)

$

17‌

T.

ROWE

PRICE

Short

Duration

Income

Fund

48

require

the

exchange

of

collateral

to

cover

mark-to-market

exposure.

MNAs

may

be

in

the

form

of

International

Swaps

and

Derivatives

Association

master

agreements

(ISDAs)

or

foreign

exchange

letter

agreements

(FX

letters).

MNAs

provide

the

ability

to

offset

amounts

the

fund

owes

a

counterparty

against

amounts

the

counterparty

owes

the

fund

(net

settlement).

Both

ISDAs

and

FX

letters

generally

allow

termination

of

transactions

and

net

settlement

upon

the

occurrence

of

contractually

specified

events,

such

as

failure

to

pay

or

bankruptcy.

In

addition,

ISDAs

specify

other

events,

the

occurrence

of

which

would

allow

one

of

the

parties

to

terminate.

For

example,

a

downgrade

in

credit

rating

of

a

counterparty

below

a

specified

rating

would

allow

the

fund

to

terminate,

while

a

decline

in

the

fund’s

net

assets

of

more

than

a

specified

percentage

would

allow

the

counterparty

to

terminate.

Upon

termination,

all

transactions

with

that

counterparty

would

be

liquidated

and

a

net

termination

amount

settled.

ISDAs

typically

include

collateral

agreements

whereas

FX

letters

do

not.

Collateral

requirements

are

determined

daily

based

on

the

net

aggregate

unrealized

gain

or

loss

on

all

bilateral

derivatives

with

a

counterparty,

subject

to

minimum

transfer

amounts

that

typically

range

from

$100,000

to

$250,000.

Any

additional

collateral

required

due

to

changes

in

security

values

is

typically

transferred

the

next

business

day.

Collateral

may

be

in

the

form

of

cash

or

debt

securities

issued

by

the

U.S.

government

or

related

agencies,

although

other

securities

may

be

used

depending

on

the

terms

outlined

in

the

applicable

MNA.

Cash

posted

by

the

fund

is

reflected

as

cash

deposits

in

the

accompanying

financial

statements

and

generally

is

restricted

from

withdrawal

by

the

fund;

securities

posted

by

the

fund

are

so

noted

in

the

accompanying

Portfolio

of

Investments;

both

remain

in

the

fund’s

assets.

Collateral

pledged

by

counterparties

is

not

included

in

the

fund’s

assets

because

the

fund

does

not

obtain

effective

control

over

those

assets.

For

bilateral

derivatives,

collateral

posted

or

received

by

the

fund

is

held

in

a

segregated

account

at

the

fund’s

custodian.

While

typically

not

sold

in

the

same

manner

as

equity

or

fixed

income

securities,

exchange-traded

or

centrally

cleared

derivatives

may

be

closed

out

only

on

the

exchange

or

clearinghouse

where

the

contracts

were

cleared,

and

OTC

and

bilateral

derivatives

may

be

unwound

with

counterparties

or

transactions

assigned

to

other

counterparties

to

allow

the

fund

to

exit

the

transaction.

This

ability

is

subject

to

the

liquidity

of

underlying

positions. As

of

November

30,

2022,

no

collateral

was

pledged

by

either

the

fund

or

counterparties for

bilateral

derivatives. As

of

November

30,

2022,

securities

valued

at $102,000

had

been

posted

by

the

fund

for

exchange-traded

and/or

centrally

cleared

derivatives.

Futures

Contracts

 The

fund

is

subject

to interest

rate

risk in

the

normal

course

of

pursuing

its

investment

objectives

and

uses

futures

contracts

to

help

manage

such

risk.

The

fund

may

enter

into

futures

contracts

to

manage

exposure

to

interest

rate

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and

yield

curve

movements,

security

prices,

foreign

currencies,

credit

quality,

and

mortgage

prepayments;

as

an

efficient

means

of

adjusting

exposure

to

all

or

part

of

a

target

market;

to

enhance

income;

as

a

cash

management

tool;

or

to

adjust

portfolio

duration

and

credit

exposure. A

futures

contract

provides

for

the

future

sale

by

one

party

and

purchase

by

another

of

a

specified

amount

of

a

specific

underlying

financial

instrument

at

an

agreed-upon

price,

date,

time,

and

place.

The

fund

currently

invests

only

in

exchange-traded

futures,

which

generally

are

standardized

as

to

maturity

date,

underlying

financial

instrument,

and

other

contract

terms.

Payments

are

made

or

received

by

the

fund

each

day

to

settle

daily

fluctuations

in

the

value

of

the

contract

(variation

margin),

which

reflect

changes

in

the

value

of

the

underlying

financial

instrument.

Variation

margin

is

recorded

as

unrealized

gain

or

loss

until

the

contract

is

closed.

The

value

of

a

futures

contract

included

in

net

assets

is

the

amount

of

unsettled

variation

margin;

net

variation

margin

receivable

is

reflected

as

an

asset

and

net

variation

margin

payable

is

reflected

as

a

liability

on

the

accompanying

Statement

of

Assets

and

Liabilities.

Risks

related

to

the

use

of

futures

contracts

include

possible

illiquidity

of

the

futures

markets,

contract

prices

that

can

be

highly

volatile

and

imperfectly

correlated

to

movements

in

hedged

security

values

and/or

interest

rates,

and

potential

losses

in

excess

of

the

fund’s

initial

investment.

During

the

six

months ended

November

30,

2022,

the

volume

of

the

fund’s

activity

in

futures,

based

on

underlying

notional

amounts,

was

generally

between

21%

and

28%

of

net

assets.

Swaps

 The

fund

is

subject

to

credit

risk in

the

normal

course

of

pursuing

its

investment

objectives

and

uses

swap

contracts

to

help

manage

such

risk.

The

fund

may

use

swaps

in

an

effort

to

manage

both

long

and

short

exposure

to

changes

in

interest

rates,

inflation

rates,

and

credit

quality;

to

adjust

overall

exposure

to

certain

markets;

to

enhance

total

return

or

protect

the

value

of

portfolio

securities;

to

serve

as

a

cash

management

tool;

or

to

adjust

portfolio

duration

and

credit

exposure.

Swap

agreements

can

be

settled

either

directly

with

the

counterparty

(bilateral

swap)

or

through

a

central

clearinghouse

(centrally

cleared

swap).

Fluctuations

in

the

fair

value

of

a

contract

are

reflected

in

unrealized

gain

or

loss

and

are

reclassified

to

realized

gain

or

loss

upon

contract

termination

or

cash

settlement.

Net

periodic

receipts

or

payments

required

by

a

contract

increase

or

decrease,

respectively,

the

value

of

the

contract

until

the

contractual

payment

date,

at

which

time

such

amounts

are

reclassified

from

unrealized

to

realized

gain

or

loss.

For

bilateral

swaps,

cash

payments

are

made

or

received

by

the

fund

on

a

periodic

basis

in

accordance

with

contract

terms;

unrealized

gain

on

contracts

and

premiums

paid

are

reflected

as

assets

and

unrealized

loss

on

contracts

and

premiums

received

are

reflected

as

liabilities

on

the

accompanying

Statement

of

Assets

and

Liabilities.

For

bilateral

swaps,

premiums

paid

or

received

are

amortized

over

the

life

of

the

swap

and

are

recognized

as

realized

gain

or

loss

in

the

Statement

of

Operations.

For

centrally

cleared

swaps,

payments

are

made

or

received

by

the

fund

each

day

to

settle

the

daily

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fluctuation

in

the

value

of

the

contract

(variation

margin).

Accordingly,

the

value

of

a

centrally

cleared

swap

included

in

net

assets

is

the

unsettled

variation

margin;

net

variation

margin

receivable

is

reflected

as

an

asset

and

net

variation

margin

payable

is

reflected

as

a

liability

on

the

accompanying

Statement

of

Assets

and

Liabilities.

Credit

default

swaps

are

agreements

where

one

party

(the

protection

buyer)

agrees

to

make

periodic

payments

to

another

party

(the

protection

seller)

in

exchange

for

protection

against

specified

credit

events,

such

as

certain

defaults

and

bankruptcies

related

to

an

underlying

credit

instrument,

or

issuer

or

index

of

such

instruments.

Upon

occurrence

of

a

specified

credit

event,

the

protection

seller

is

required

to

pay

the

buyer

the

difference

between

the

notional

amount

of

the

swap

and

the

value

of

the

underlying

credit,

either

in

the

form

of

a

net

cash

settlement

or

by

paying

the

gross

notional

amount

and

accepting

delivery

of

the

relevant

underlying

credit.

For

credit

default

swaps

where

the

underlying

credit

is

an

index,

a

specified

credit

event

may

affect

all

or

individual

underlying

securities

included

in

the

index

and

will

be

settled

based

upon

the

relative

weighting

of

the

affected

underlying

security(ies)

within

the

index. Generally,

the

payment

risk

for

the

seller

of

protection

is

inversely

related

to

the

current

market

price

or

credit

rating

of

the

underlying

credit

or

the

market

value

of

the

contract

relative

to

the

notional

amount,

which

are

indicators

of

the

markets’

valuation

of

credit

quality.

As

of

November

30,

2022,

the

notional

amount

of

protection

sold

by

the

fund

totaled $940,000

(2.0%

of

net

assets),

which

reflects

the

maximum

potential

amount

the

fund

could

be

required

to

pay

under

such

contracts.

Risks

related

to

the

use

of

credit

default

swaps

include

the

possible

inability

of

the

fund

to

accurately

assess

the

current

and

future

creditworthiness

of

underlying

issuers,

the

possible

failure

of

a

counterparty

to

perform

in

accordance

with

the

terms

of

the

swap

agreements,

potential

government

regulation

that

could

adversely

affect

the

fund’s

swap

investments,

and

potential

losses

in

excess

of

the

fund’s

initial

investment.

During

the

six

months ended

November

30,

2022,

the

volume

of

the

fund’s

activity

in

swaps,

based

on

underlying

notional

amounts,

was

generally

between

0%

and

5%

of

net

assets.

NOTE

4

-

OTHER

INVESTMENT

TRANSACTIONS 

Consistent

with

its

investment

objective,

the

fund

engages

in

the

following

practices

to

manage

exposure

to

certain

risks

and/or

to

enhance

performance.

The

investment

objective,

policies,

program,

and

risk

factors

of

the

fund

are

described

more

fully

in

the

fund’s

prospectus

and

Statement

of

Additional

Information.

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51

Noninvestment-Grade

Debt

 The

fund

invests,

either

directly

or

through

its

investment

in

other

T.

Rowe

Price

funds,

in

noninvestment-grade

debt,

including

“high

yield”

or

“junk”

bonds

or

leveraged

loans.

Noninvestment-grade

debt

issuers

are

more

likely

to

suffer

an

adverse

change

in

financial

condition

that

would

result

in

the

inability

to

meet

a

financial

obligation.

The

noninvestment-grade

debt

market

may

experience

sudden

and

sharp

price

swings

due

to

a

variety

of

factors

that

may

decrease

the

ability

of

issuers

to

make

principal

and

interest

payments

and

adversely

affect

the

liquidity

or

value,

or

both,

of

such

securities.

Accordingly,

securities

issued

by

such

companies

carry

a

higher

risk

of

default

and

should

be

considered

speculative. 

Restricted

Securities

 The

fund

invests

in

securities

that

are

subject

to

legal

or

contractual

restrictions

on

resale.

Prompt

sale

of

such

securities

at

an

acceptable

price

may

be

difficult

and

may

involve

substantial

delays

and

additional

costs.

Collateralized

Loan

Obligations 

 The

fund

invests

in

collateralized

loan

obligations

(CLOs)

which

are

entities

backed

by

a

diversified

pool

of

syndicated

bank

loans.

The

cash

flows

of

the

CLO

can

be

split

into

multiple

segments,

called

“tranches”

or

“classes”,

which

will

vary

in

risk

profile

and

yield.

The

riskiest

segments,

which

are

the

subordinate

or

“equity”

tranches,

bear

the

greatest

risk

of

loss

from

defaults

in

the

underlying

assets

of

the

CLO

and

serve

to

protect

the

other,

more

senior,

tranches.

Senior

tranches

will

typically

have

higher

credit

ratings

and

lower

yields

than

the

securities

underlying

the

CLO.

Despite

the

protection

from

the

more

junior

tranches,

senior

tranches

can

experience

substantial

losses. 

Mortgage-Backed

Securities

 The

fund

invests

in

mortgage-backed

securities

(MBS

or

pass-through

certificates)

that

represent

an

interest

in

a

pool

of

specific

underlying

mortgage

loans

and

entitle

the

fund

to

the

periodic

payments

of

principal

and

interest

from

those

mortgages.

MBS

may

be

issued

by

government

agencies

or

corporations,

or

private

issuers.

Most

MBS

issued

by

government

agencies

are

guaranteed;

however,

the

degree

of

protection

differs

based

on

the

issuer.

MBS are

sensitive

to

changes

in

economic

conditions

that

affect

the

rate

of

prepayments

and

defaults

on

the

underlying

mortgages;

accordingly,

the

value,

income,

and

related

cash

flows

from

MBS

may

be

more

volatile

than

other

debt

instruments.

TBA

Purchase,

Sale

Commitments

and

Forward

Settling

Mortgage

Obligations

 The

fund

enters

into

to-be-announced

(TBA)

purchase

or

sale

commitments

(collectively,

TBA

transactions),

pursuant

to

which

it

agrees

to

purchase

or

sell,

respectively,

mortgage-backed

securities

for

a

fixed

unit

price,

with

payment

and

delivery

at

a

scheduled

future

date

beyond

the

customary

settlement

period

for

such

securities.

With

TBA

transactions,

the

particular

securities

to

be

received

or

delivered

by

the

fund

are

not

identified

at

the

trade

date;

however,

the

securities

must

meet

specified

terms,

including

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52

rate

and

mortgage

term,

and

be

within

industry-accepted

“good

delivery”

standards.

The

fund

may

enter

into

TBA

transactions

with

the

intention

of

taking

possession

of

or

relinquishing

the

underlying

securities,

may

elect

to

extend

the

settlement

by

“rolling”

the

transaction,

and/or

may

use

TBA

transactions

to

gain

or

reduce

interim

exposure

to

underlying

securities.

Until

settlement,

the

fund

maintains

liquid

assets

sufficient

to

settle

its

commitment

to

purchase

a

TBA

or,

in

the

case

of

a

sale

commitment,

the

fund

maintains

an

entitlement

to

the

security

to

be

sold. 

To

mitigate

counterparty

risk,

the

fund

has

entered

into

Master

Securities

Forward

Transaction

Agreements

(MSFTA)

with

counterparties

that

provide

for

collateral

and

the

right

to

offset

amounts

due

to

or

from

those

counterparties

under

specified

conditions.

Subject

to

minimum

transfer

amounts,

collateral

requirements

are

determined

and

transfers

made

based

on

the

net

aggregate

unrealized

gain

or

loss

on

all

TBA

commitments

and

other

forward

settling

mortgage

obligations

with

a

particular

counterparty

(collectively,

MSFTA

Transactions).

At

any

time,

the

fund’s

risk

of

loss

from

a

particular

counterparty

related

to

its

MSFTA

Transactions

is

the

aggregate

unrealized

gain

on

appreciated

MSFTA

Transactions

in

excess

of

unrealized

loss

on

depreciated

MSFTA

Transactions

and

collateral

received,

if

any,

from

such

counterparty. As

of

November

30,

2022,

no

collateral

was

pledged

by

the

fund

or

counterparties

for

MSFTA

Transactions.

Bank

Loans

 The

fund

invests

in

bank

loans,

which

represent

an

interest

in

amounts

owed

by

a

borrower

to

a

syndicate

of

lenders.

Bank

loans

are

generally

noninvestment

grade

and

often

involve

borrowers

whose

financial

condition

is

highly

leveraged.

The

fund

may

invest

in

fixed

and

floating

rate

loans,

which

may

include

senior

floating

rate

loans;

secured

and

unsecured

loans,

second

lien

or

more

junior

loans;

and

bridge

loans

or

bridge

facilities.

Certain

bank

loans

may

be

revolvers

which

are

a

form

of

senior

bank

debt,

where

the

borrower

can

draw

down

the

credit

of

the

revolver

when

it

needs

cash

and

repays

the

credit

when

the

borrower

has

excess

cash.

Certain

loans

may

be

“covenant-lite”

loans,

which

means

the

loans

contain

fewer

maintenance

covenants

than

other

loans

(in

some

cases,

none)

and

do

not

include

terms

which

allow

the

lender

to

monitor

the

performance

of

the

borrower

and

declare

a

default

if

certain

criteria

are

breached.

As

a

result

of

these

risks,

the

fund’s

exposure

to

losses

may

be

increased.

Bank

loans

may

be

in

the

form

of

either

assignments

or

participations.

A

loan

assignment

transfers

all

legal,

beneficial,

and

economic

rights

to

the

buyer,

and

transfer

typically

requires

consent

of

both

the

borrower

and

agent.

In

contrast,

a

loan

participation

generally

entitles

the

buyer

to

receive

the

cash

flows

from

principal,

interest,

and

any

fee

payments

on

a

portion

of

a

loan;

however,

the

seller

continues

to

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53

hold

legal

title

to

that

portion

of

the

loan.

As

a

result,

the

buyer

of

a

loan

participation

generally

has

no

direct

recourse

against

the

borrower

and

is

exposed

to

credit

risk

of

both

the

borrower

and

seller

of

the

participation.

Bank

loans

often

have

extended

settlement

periods,

generally

may

be

repaid

at

any

time

at

the

option

of

the

borrower,

and

may

require

additional

principal

to

be

funded

at

the

borrowers’

discretion

at

a

later

date

(e.g.

unfunded

commitments

and

revolving

debt

instruments).

Until

settlement,

the

fund

maintains

liquid

assets

sufficient

to

settle

its

unfunded

loan

commitments.

The

fund

reflects

both

the

funded

portion

of

a

bank

loan

as

well

as

its

unfunded

commitment

in

the

Portfolio

of

Investments.

However,

if

a

credit

agreement

provides

no

initial

funding

of

a

tranche,

and

funding

of

the

full

commitment

at

a

future

date(s)

is

at

the

borrower’s

discretion

and

considered

uncertain,

a

loan

is

reflected

in

the

Portfolio

of

Investments

only

if,

and

only

to

the

extent

that,

the

fund

has

actually

settled

a

funding

commitment.

LIBOR

Transition

 The fund

may

invest

in

instruments

that

are

tied

to

reference

rates,

including

London

Interbank

Offered

Rate

(LIBOR).

Over

the

course

of

the

last

several

years,

global

regulators

have

indicated

an

intent

to

phase

out

the

use

of

LIBOR

and

similar

interbank

offered

rates

(IBOR).

While

publication

for

most

LIBOR

currencies

and

lesser-used

USD

LIBOR

settings

ceased

immediately

after

December

31,

2021,

remaining

USD

LIBOR

settings

will

continue

to

be

published

until

June

30,

2023.

There

remains

uncertainty

regarding

the

future

utilization

of

LIBOR

and

the

nature

of

any

replacement

rate.

Any

potential

effects

of

the

transition

away

from

LIBOR

on

the fund,

or

on

certain

instruments

in

which

the fund

invests,

cannot

yet

be

determined.

The

transition

process

may

result

in,

among

other

things,

an

increase

in

volatility

or

illiquidity

of

markets

for

instruments

that

currently

rely

on

LIBOR,

a

reduction

in

the

value

of

certain

instruments

held

by

the fund,

or

a

reduction

in

the

effectiveness

of

related

fund

transactions

such

as

hedges.

Any

such

effects

could

have

an

adverse

impact

on

the fund's

performance.

Securities

Lending

 The fund

may

lend

its

securities

to

approved

borrowers

to

earn

additional

income.

Its

securities

lending

activities

are

administered

by

a

lending

agent

in

accordance

with

a

securities

lending

agreement.

Security

loans

generally

do

not

have

stated

maturity

dates,

and

the

fund

may

recall

a

security

at

any

time.

The

fund

receives

collateral

in

the

form

of

cash

or

U.S.

government

securities.

Collateral

is

maintained

over

the

life

of

the

loan

in

an

amount

not

less

than

the

value

of

loaned

securities;

any

additional

collateral

required

due

to

changes

in

security

values

is

delivered

to

the

fund

the

next

business

day.

Cash

collateral

is

invested

in

accordance

with

investment

guidelines

approved

by

fund

management.

Additionally,

the

lending

agent

indemnifies

the

fund

against

losses

resulting

from

borrower

default.

Although

risk

is

mitigated

by

the

collateral

and

indemnification,

the

fund

could

experience

a

delay

in

recovering

T.

ROWE

PRICE

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Duration

Income

Fund

54

its

securities

and

a

possible

loss

of

income

or

value

if

the

borrower

fails

to

return

the

securities,

collateral

investments

decline

in

value,

and

the

lending

agent

fails

to

perform.

Securities

lending

revenue

consists

of

earnings

on

invested

collateral

and

borrowing

fees,

net

of

any

rebates

to

the

borrower,

compensation

to

the

lending

agent,

and

other

administrative

costs.

In

accordance

with

GAAP,

investments

made

with

cash

collateral

are

reflected

in

the

accompanying

financial

statements,

but

collateral

received

in

the

form

of

securities

is

not.

At

November

30,

2022,

the

value

of

loaned

securities

was

$179,000;

the

value

of

cash

collateral

and

related

investments

was

$185,000.

Other 

Purchases

and

sales

of

portfolio

securities

other

than

short-term and

U.S.

government

securities

aggregated $5,060,000 and

$8,454,000,

respectively,

for

the

six

months ended

November

30,

2022.

Purchases

and

sales

of

U.S.

government

securities

aggregated

$17,200,000 and

$15,696,000,

respectively,

for

the

six

months ended

November

30,

2022.

NOTE

5

-

FEDERAL

INCOME

TAXES

No

provision

for

federal

income

taxes

is

required

since

the

fund

intends

to

continue

to

qualify

as

a

regulated

investment

company

under

Subchapter

M

of

the

Internal

Revenue

Code

and

distribute

to

shareholders

all

of

its

taxable

income

and

gains.

Distributions

determined

in

accordance

with

federal

income

tax

regulations

may

differ

in

amount

or

character

from

net

investment

income

and

realized

gains

for

financial

reporting

purposes.

Financial

reporting

records

are

adjusted

for

permanent

book/tax

differences

to

reflect

tax

character

but

are

not

adjusted

for

temporary

differences.

The

amount

and

character

of

tax-basis

distributions

and

composition

of

net

assets

are

finalized

at

fiscal

year-end;

accordingly,

tax-basis

balances

have

not

been

determined

as

of

the

date

of

this

report.

At

November

30,

2022,

the

cost

of

investments

(including

derivatives,

if

any) for

federal

income

tax

purposes

was

$49,450,000.

Net

unrealized

loss

aggregated

$2,252,000

at

period-end,

of

which

$57,000

related

to

appreciated

investments

and

$2,309,000

related

to

depreciated

investments.

NOTE

6

-

RELATED

PARTY

TRANSACTIONS

The

fund

is

managed

by

T.

Rowe

Price

Associates,

Inc.

(Price

Associates),

a

wholly

owned

subsidiary

of

T.

Rowe

Price

Group,

Inc.

(Price

Group).

 Price

Associates

has

entered

into

a

sub-advisory

agreement(s)

with

one

or

more

of

its

wholly

owned

subsidiaries,

to

provide

investment

advisory

services

to

the

fund.The

investment

T.

ROWE

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Duration

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Fund

55

management

agreement

between

the

fund

and

Price

Associates

provides

for

an

annual

investment

management

fee,

which

is

computed

daily

and

paid

monthly.

The

fee

is

determined

by

applying

a

group

fee

rate

to

the

fund’s

average

daily

net

assets.

The

group

fee

rate

is

calculated

based

on

the

combined

net

assets

of

certain

mutual

funds

sponsored

by

Price

Associates

(the

group)

applied

to

a

graduated

fee

schedule,

with

rates

ranging

from

0.48%

for

the

first

$1

billion

of

assets

to

0.260%

for

assets

in

excess

of

$845

billion. At

November

30,

2022,

the

effective

annual

group

fee

rate

was

0.29%.

The Investor Class

is

subject

to

a

contractual

expense

limitation

through

the

expense

limitation

date

indicated

in

the

table

below.

During

the

limitation

period,

Price

Associates

is

required

to

waive

its

management

fee

or

pay

any

expenses

(excluding

interest;

expenses

related

to

borrowings,

taxes,

and

brokerage;

non-recurring,

extraordinary expenses;

and

acquired

fund

fees

and

expenses) that

would

otherwise

cause

the

class’s

ratio

of

annualized

total

expenses

to

average

net

assets

(net

expense

ratio)

to

exceed

its

expense

limitation.

The

class

is

required

to

repay

Price

Associates

for

expenses

previously

waived/paid

to

the

extent

the

class’s

net

assets

grow

or

expenses

decline

sufficiently

to

allow

repayment

without

causing

the

class’s

net

expense

ratio

(after

the

repayment

is

taken

into

account)

to

exceed

the

lesser

of:

(1)

the

expense

limitation

in

place

at

the

time

such

amounts

were

waived;

or

(2)

the

class’s

current

expense

limitation.

However,

no

repayment

will

be

made

more

than

three

years

after

the

date

of

a

payment

or

waiver.

The

I

Class

is

also

subject

to

an

operating

expense

limitation

(I

Class

Limit)

pursuant

to

which

Price

Associates

is

contractually

required

to

pay

all

operating

expenses

of

the

I

Class,

excluding

management

fees;

interest;

expenses

related

to

borrowings,

taxes,

and

brokerage; non-recurring,

extraordinary expenses; and

acquired

fund

fees

and

expenses, to

the

extent

such

operating

expenses,

on

an

annualized

basis,

exceed

the

I

Class

Limit. This

agreement

will

continue

through

the

expense

limitation

date

indicated

in

the

table

below,

and

may

be

renewed,

revised,

or

revoked

only

with

approval

of

the

fund’s

Board.

The

I

Class

is

required

to

repay

Price

Associates

for

expenses

previously

paid

to

the

extent

the

class’s

net

assets

grow

or

expenses

decline

sufficiently

to

allow

repayment

without

causing

the

class’s

operating

expenses

(after

the

repayment

is

taken

into

account)

to

exceed

the

lesser

of:

(1)

the

I

Class

Limit

in

place

at

the

time

such

amounts

were

paid;

or

(2)

the

current

I

Class

Limit.

However,

no

repayment

will

be

made

more

than

three

years

after

the

date

of

a

payment

or

waiver.

Pursuant

to

these

agreements,

expenses

were

waived/paid

by

and/or

repaid

to

Price

Associates

during

the

six

months ended November

30,

2022

as

indicated

in

the

table

below

and

remain

subject

to

repayment

by

the

fund.

Including these

amounts,

expenses

previously

waived/paid

by

Price

Associates

in

the

amount

of $586,000 remain

subject

to

repayment

by

the

fund

at

November

30,

2022.

Any

repayment

of

expenses

T.

ROWE

PRICE

Short

Duration

Income

Fund

56

previously

waived/paid

by

Price

Associates

during

the

period

would

be

included

in

the

net

investment

income

and

expense

ratios

presented

on

the

accompanying

Financial

Highlights.

In

addition,

the

fund

has

entered

into

service

agreements

with

Price

Associates

and

a

wholly

owned

subsidiary

of

Price

Associates,

each

an

affiliate

of

the

fund

(collectively,

Price).

Price

Associates

provides

certain

accounting

and

administrative

services

to

the

fund.

T.

Rowe

Price

Services,

Inc.

provides

shareholder

and

administrative

services

in

its

capacity

as

the

fund’s

transfer

and

dividend-disbursing

agent.

For

the

six

months ended

November

30,

2022,

expenses

incurred

pursuant

to

these

service

agreements

were

$50,000 for

Price

Associates

and $13,000

for

T.

Rowe

Price

Services,

Inc.

All

amounts

due

to

and

due

from

Price,

exclusive

of

investment

management

fees

payable,

are

presented

net

on

the

accompanying

Statement

of

Assets

and

Liabilities.

The fund

may

invest

its

cash

reserves

in

certain

open-end

management

investment

companies

managed

by

Price

Associates

and

considered

affiliates

of

the

fund:

the

T.

Rowe

Price

Government

Reserve

Fund

or

the

T.

Rowe

Price

Treasury

Reserve

Fund,

organized

as

money

market

funds (together,

the

Price

Reserve

Funds).

The

Price

Reserve

Funds

are

offered

as

short-term

investment

options

to

mutual

funds,

trusts,

and

other

accounts

managed

by

Price

Associates

or

its

affiliates

and

are

not

available

for

direct

purchase

by

members

of

the

public.

Cash

collateral

from

securities

lending,

if

any,

is

invested

in

the

T.

Rowe

Price

Government

Reserve Fund. The

Price

Reserve

Funds

pay

no

investment

management

fees.

As

of

November

30,

2022,

T.

Rowe

Price

Group,

Inc.,

or

its

wholly

owned

subsidiaries,

owned

1,975,000

shares

of

the

Investor

Class,

representing

62%

of

the

Investor

Class's

net

assets. 

The

fund may

participate

in

securities

purchase

and

sale

transactions

with

other

funds

or

accounts

advised

by

Price

Associates

(cross

trades),

in

accordance

with

procedures

adopted

by the

fund’s

Board

and

Securities

and

Exchange

Commission

rules,

which

require,

among

other

things,

that

such

purchase

and

sale

cross

trades

be

effected

at

the

independent

current

market

price

of

the

security.

During

the

six

months ended

November

30,

2022,

the

fund

had

no

purchases

or

sales

cross

trades

with

other

funds

or

accounts

advised

by

Price

Associates.

Investor

Class

I

Class

Expense

limitation/I

Class

Limit

0.40%

0.01%

Expense

limitation

date

09/30/23

09/30/23

(Waived)/repaid

during

the

period

($000s)

$(101)

$(58)

T.

ROWE

PRICE

Short

Duration

Income

Fund

57

NOTE

7

-

OTHER

MATTERS

Unpredictable

events

such

as

environmental

or

natural

disasters,

war,

terrorism,

pandemics,

outbreaks

of

infectious

diseases,

and

similar

public

health

threats

may

significantly

affect

the

economy

and

the

markets

and

issuers

in

which

a

fund

invests.

Certain

events

may

cause

instability

across

global

markets,

including

reduced

liquidity

and

disruptions

in

trading

markets,

while

some

events

may

affect

certain

geographic

regions,

countries,

sectors,

and

industries

more

significantly

than

others,

and

exacerbate

other

pre-existing

political,

social,

and

economic

risks.

Since

2020,

a

novel

strain

of

coronavirus

(COVID-19)

has

resulted

in

disruptions

to

global

business

activity

and

caused

significant

volatility

and

declines

in

global

financial

markets.

In

February

2022,

Russian

forces

entered

Ukraine

and

commenced

an

armed

conflict

leading

to

economic

sanctions

being

imposed

on

Russia

and

certain

of

its

citizens,

creating

impacts

on

Russian-related

stocks

and

debt

and

greater

volatility

in

global

markets.

These

are

recent

examples

of

global

events

which

may

have

a

negative

impact

on

the

values

of

certain

portfolio

holdings

or

the

fund’s

overall

performance.

Management

is

actively

monitoring

the

risks

and

financial

impacts

arising

from

these

events.

T.

ROWE

PRICE

Short

Duration

Income

Fund

58

INFORMATION

ON

PROXY

VOTING

POLICIES,

PROCEDURES,

AND

RECORDS

A

description

of

the

policies

and

procedures

used

by

T.

Rowe

Price

funds

to

determine

how

to

vote

proxies

relating

to

portfolio

securities

is

available

in

each

fund’s

Statement

of

Additional

Information.

You

may

request

this

document

by

calling

1-800-225-5132

or

by

accessing

the

SEC’s

website,

sec.gov.

The

description

of

our

proxy

voting

policies

and

procedures

is

also

available

on

our

corporate

website.

To

access

it,

please

visit

the

following

Web

page:

https://www.troweprice.com/corporate/us/en/utility/policies.html

Scroll

down

to

the

section

near

the

bottom

of

the

page

that

says,

“Proxy

Voting

Guidelines.”

Click

on

the

links

in

the

shaded

box.

Each

fund’s

most

recent

annual

proxy

voting

record

is

available

on

our

website

and

through

the

SEC’s

website.

To

access

it

through

T.

Rowe

Price,

visit

the

website

location

shown

above,

and

scroll

down

to

the

section

near

the

bottom

of

the

page

that

says,

“Proxy

Voting

Records.”

Click

on

the

Proxy

Voting

Records

link

in

the

shaded

box.

HOW

TO

OBTAIN

QUARTERLY

PORTFOLIO

HOLDINGS

The

fund

files

a

complete

schedule

of

portfolio

holdings

with

the

Securities

and

Exchange

Commission

(SEC)

for

the

first

and

third

quarters

of

each

fiscal

year

as

an

exhibit

to

its

reports

on

Form

N-PORT.

The

fund’s

reports

on

Form

N-PORT

are

available

electronically

on

the

SEC’s

website

(sec.gov).

In

addition,

most

T.

Rowe

Price

funds

disclose

their

first

and

third

fiscal

quarter-end

holdings

on

troweprice.com

.

T.

ROWE

PRICE

Short

Duration

Income

Fund

59

APPROVAL

OF

SUBADVISORY

AGREEMENT

At

a

meeting

held

on

July

25,

2022

(Meeting),

the

fund’s

Board

of

Directors

(Board)

considered

the

initial

approval

of

an

investment

subadvisory

agreement

(Subadvisory

Contract)

that

T.

Rowe

Price

Associates,

Inc.

(Adviser),

entered

into

with

T.

Rowe

Price

International

Ltd

(Subadviser)

on

behalf

of

the

fund.

The

Subadvisory

Contract

authorizes

the

Subadviser

to

have

investment

discretion

with

respect

to

all

or

a

portion

of

the

fund’s

portfolio.

The

Board

noted

that

the

Subadvisory

Contract

will

be

substantially

similar

to

other

subadvisory

agreements

that

are

in

place

for

other

T.

Rowe

Price

funds

that

delegate

investment

management

responsibilities

to

affiliated

investment

advisers

and

that

the

Adviser

will

retain

oversight

responsibilities

with

respect

to

the

fund.

The

Board

also

noted

that

the

new

subadvisory

arrangement

will

not

change

the

total

advisory

fees

paid

by

the

fund.

However,

under

the

Subadvisory

Contract,

the

Adviser

may

pay

the

Subadviser

up

to

60%

of

the

advisory

fees

that

the

Adviser

receives

from

the

fund.

At

the

Meeting,

the

Board

reviewed

materials

relevant

to

its

consideration

of

the

proposed

Subadvisory

Contract.

Each

year,

the

Board

considers

the

continuation

of

the

investment

management

agreement

(Advisory

Contract)

between

the

fund

and

the

Adviser.

The

fund’s

Advisory

Contract

was

most

recently

approved

by

the

Board

at

a

meeting

held

on

March

7–8,

2022

(March

Meeting).

A

discussion

of

the

basis

for

the

Board’s

approval

of

the

Advisory

Contract

is

included

in

the

fund’s

annual

shareholder

report

for

the

period

ended

May

31,

2022.

The

factors

considered

by

the

Board

at

the

Meeting

in

connection

with

approval

of

the

proposed

Subadvisory

Contract

were

substantially

similar

to

the

factors

considered

at

the

March

Meeting

in

connection

with

the

approval

to

continue

the

Advisory

Contract.

The

independent

directors

were

assisted

in

their

evaluation

of

the

Subadvisory

Contract

by

independent

legal

counsel

from

whom

they

received

separate

legal

advice

and

with

whom

they

met

separately.

Following

discussion

at

the

Meeting,

the

Board,

including

all

of

the

fund’s

independent

directors,

approved

the

Subadvisory

Contract

between

the

Adviser

and

Subadviser

on

behalf

of

the

fund.

No

single

factor

was

considered

in

isolation

or

to

be

determinative

to

the

decision.

Rather,

the

Board

concluded,

in

light

of

a

weighting

and

balancing

of

all

factors

considered,

that

it

was

in

the

best

interests

of

the

fund

and

its

shareholders

for

the

Board

to

approve

the

Subadvisory

Contract

effective

September

1,

2022.

T.

ROWE

PRICE

Short

Duration

Income

Fund

60

LIQUIDITY

RISK

MANAGEMENT

PROGRAM

In

accordance

with

Rule

22e-4

(Liquidity

Rule)

under

the

Investment

Company

Act

of

1940,

as

amended,

the

fund

has

established

a

liquidity

risk

management

program

(Liquidity

Program)

reasonably

designed

to

assess

and

manage

the

fund’s

liquidity

risk,

which

generally

represents

the

risk

that

the

fund

would

not

be

able

to

meet

redemption

requests

without

significant

dilution

of

remaining

investors’

interests

in

the

fund.

The

fund’s

Board

of

Directors

(Board)

has

appointed

the

fund’s

investment

adviser,

T.

Rowe

Price

Associates,

Inc.

(Adviser),

as

the

administrator

of

the

Liquidity

Program.

As

administrator,

the

Adviser

is

responsible

for

overseeing

the

day-to-day

operations

of

the

Liquidity

Program

and,

among

other

things,

is

responsible

for

assessing,

managing,

and

reviewing

with

the

Board

at

least

annually

the

liquidity

risk

of

each

T.

Rowe

Price

fund.

The

Adviser

has

delegated

oversight

of

the

Liquidity

Program

to

a

Liquidity

Risk

Committee

(LRC),

which

is

a

cross-functional

committee

composed

of

personnel

from

multiple

departments

within

the

Adviser.

The

Liquidity

Program’s

principal

objectives

include

supporting

the

T.

Rowe

Price

funds’

compliance

with

limits

on

investments

in

illiquid

assets

and

mitigating

the

risk

that

the

fund

will

be

unable

to

timely

meet

its

redemption

obligations.

The

Liquidity

Program

also

includes

a

number

of

elements

that

support

the

management

and

assessment

of

liquidity

risk,

including

an

annual

assessment

of

factors

that

influence

the

fund’s

liquidity

and

the

periodic

classification

and

reclassification

of

a

fund’s

investments

into

categories

that

reflect

the

LRC’s

assessment

of

their

relative

liquidity

under

current

market

conditions.

Under

the

Liquidity

Program,

every

investment

held

by

the

fund

is

classified

at

least

monthly

into

one

of

four

liquidity

categories

based

on

estimations

of

the

investment’s

ability

to

be

sold

during

designated

time

frames

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

As

required

by

the

Liquidity

Rule,

at

a

meeting

held

on

July

25,

2022,

the

Board

was

presented

with

an

annual

assessment

prepared

by

the

LRC,

on

behalf

of

the

Adviser,

that

addressed

the

operation

of

the

Liquidity

Program

and

assessed

its

adequacy

and

effectiveness

of

implementation,

including

any

material

changes

to

the

Liquidity

Program

and

the

determination

of

each

fund’s

Highly

Liquid

Investment

Minimum

(HLIM).

The

annual

assessment

included

consideration

of

the

following

factors,

as

applicable:

the

fund’s

investment

strategy

and

liquidity

of

portfolio

investments

during

normal

and

reasonably

foreseeable

stressed

conditions,

including

whether

the

investment

strategy

is

appropriate

for

an

open-end

fund,

the

extent

to

which

the

strategy

involves

a

relatively

concentrated

portfolio

or

large

positions

in

particular

issuers,

and

the

use

of

borrowings

for

investment

purposes

and

derivatives;

short-term

and

long-term

cash

flow

projections

covering

both

normal

and

reasonably

foreseeable

stressed

conditions;

and

holdings

of

cash

and

cash

equivalents,

as

well

as

available

borrowing

arrangements.

T.

ROWE

PRICE

Short

Duration

Income

Fund

61

For

the

fund

and

other

T.

Rowe

Price

funds,

the

annual

assessment

incorporated

a

report

related

to

a

fund’s

holdings,

shareholder

and

portfolio

concentration,

any

borrowings

during

the

period,

cash

flow

projections,

and

other

relevant

data

for

the

period

of

April

1,

2021,

through

March

31,

2022.

The

report

described

the

methodology

for

classifying

a

fund’s

investments

(including

any

derivative

transactions)

into

one

of

four

liquidity

categories,

as

well

as

the

percentage

of

a

fund’s

investments

assigned

to

each

category.

It

also

explained

the

methodology

for

establishing

a

fund’s

HLIM

and

noted

that

the

LRC

reviews

the

HLIM

assigned

to

each

fund

no

less

frequently

than

annually.

During

the

period

covered

by

the

annual

assessment,

the

LRC

has

concluded,

and

reported

to

the

Board,

that

the

Liquidity

Program

continues

to

operate

adequately

and

effectively

and

is

reasonably

designed

to

assess

and

manage

the

fund’s

liquidity

risk.

LIQUIDITY

RISK

MANAGEMENT

PROGRAM

(continued)

T.

Rowe

Price

Investment

Services,

Inc.

|

100

East

Pratt

Street

|

Baltimore,

MD

21202-1009

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COLLEGE

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Call

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a

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summary

prospectus;

each

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investment

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risks,

fees,

expenses,

and

other

information

that

you

should

read

and

consider

carefully

before

investing.

All

mutual

funds

are

subject

to

market

risk,

including

possible

loss

of

principal.

Investing

internationally

involves

special

risks

including

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currency

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1

The

T.

Rowe

Price

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T.

Rowe

Price

Advisory

Services,

Inc.,

a

registered

investment

adviser

under

the

Investment

Advisers

Act

of

1940.

Brokerage

services

are

provided

by

T.

Rowe

Price

Investment

Services,

Inc.,

member

FINRA/SIPC.

Brokerage

accounts

are

carried

by

Pershing

LLC,

a

BNY

Mellon

Company,

member

NYSE/FINRA/SIPC.

T.

Rowe

Price

Advisory

Services,

Inc.,

and

T.

Rowe

Price

Investment

Services,

Inc.,

are

affiliated

companies.

2

Brokerage

services

are

provided

by

T.

Rowe

Price

Investment

Services,

Inc.,

member

FINRA/SIPC.

Brokerage

accounts

are

carried

by

Pershing

LLC,

a

BNY

Mellon

Company,

member

NYSE/FINRA/SIPC.

202301-2568428

F1305-051

1/23

Item 1. (b) Notice pursuant to Rule 30e-3.

Not applicable.

Item 2. Code of Ethics.

A code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions is filed as an exhibit to the registrant’s annual Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the registrant’s most recent fiscal half-year.

Item 3. Audit Committee Financial Expert.

Disclosure required in registrant’s annual Form N-CSR.

Item 4. Principal Accountant Fees and Services.

Disclosure required in registrant’s annual Form N-CSR.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There has been no change to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.

Item 11. Controls and Procedures.

(a)  The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.

(b)  The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13. Exhibits.

(a)(1)	The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is filed with the registrant’s annual Form N-CSR.
(2)	Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(3)	Written solicitation to repurchase securities issued by closed-end companies: not applicable.
(b)	A certification by the registrant’s principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

T. Rowe Price Short-Term Bond Fund, Inc.

By	/s/ David Oestreicher
	David Oestreicher
	Principal Executive Officer
Date	January 19, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/ David Oestreicher
	David Oestreicher
	Principal Executive Officer
Date	January 19, 2023

By	/s/ Alan S. Dupski
	Alan S. Dupski
	Principal Financial Officer
Date	January 19, 2023