Glossary

The Treasury yield is the interest rate on government debt securities, such as Treasury bills, notes, and bonds. 🏦

It represents the return an investor would earn by holding these securities until maturity. Treasury yields are considered a benchmark for interest rates in the broader financial market, as they reflect the risk-free rate of return since government debt is usually considered to be a safe investment.

Example: If a 10-year US Treasury bond has a yield of 2%, it means an investor who buys the bond will earn an annual return of 2% on their investment until the bond matures.

Fun fact: The difference between the yields of government debt securities with different maturities, such as the 10-year and 2-year US Treasury yields, is called the "yield curve". 📉 The shape of the yield curve can be an indicator of future economic growth and investor sentiment. A normal yield curve slopes upward, indicating higher yields for longer-term bonds, while an inverted yield curve, with short-term yields higher than long-term yields, is often seen as a sign of an upcoming recession.