Why the 10-Year U.S. Treasury Yield Matters

Why the 10-Year U.S. Treasury Yield Matters


Treasury bond yields (or rates) are tracked by investors for many reasons. The yields on the bonds are paid by the U.S. government as “interest” for borrowing money (via selling the bond). But what does it mean and how do you find yield information? 


A Treasury bill is a certificate representing a loan to the federal government that matures in three, six or 12 months. A Treasury note may mature in one to 10 years or more. A Treasury bond matures in more than 10 years and its yield is closely watched as an indicator of broader investor confidence. Because Treasurys carry the full backing of the U.S. government, they are viewed as the safest investment.


Key Takeaways

  • A treasury bond is a certificate representing a loan to the federal government that matures in more than 10 years.
  • Since they are backed by the U.S. government, they are seen as a safe investment, particularly relative to stocks and other securities.
  • Treasury bond prices and yields move in opposite directions—falling prices boost yields and rising prices lower yields.
  • The 10-year yield is used as a proxy for mortgage rates, and other measures; it’s also seen as a sign of investor sentiment about the economy.
  • A rising yield indicates falling rates and falling demand for Treasurys, which means investors would rather put their money in higher risk, higher reward investments; a falling yield suggests the opposite.


Why Is the 10-Year Treasury Yield so Important?







Changing Yields Over Time







Source link Google News

Related posts

Leave a Comment