Glossary
Treasury yield
The annual return investors earn for lending to the US government at a given maturity, the benchmark that most other interest rates are priced from.
On this page
A Treasury yield is the annual rate of return the market demands to hold US government debt of a particular maturity, such as the 3-month bill, the 2-year note or the 10-year note. Because Treasuries carry almost no credit risk, their yields form the base layer of the interest-rate system: mortgages, corporate bonds and car loans are priced as Treasury yields plus a spread, and stock valuations use them as the discount rate's starting point.
How it works
Yields and prices move in opposite directions. A Treasury's coupon is fixed, so if buyers bid its price up, the yield they lock in falls; if they sell, the price drops and the yield rises.
Short-term yields track the Federal Reserve's policy rate closely. Longer yields reflect the expected path of that rate over many years, expected inflation, and a term premium for the risk of locking money up for a decade or more.
How investors read them
The 10-year yield is the most watched single number; charting platforms show it under the symbol ^TNX, which some quote as the yield times ten. The spread between the 2-year and 10-year yields describes the shape of the yield curve. Rising yields tend to pressure growth stocks, whose value depends on profits far in the future, and to lift the US dollar. Daily par yields for every maturity are published by the Treasury.