U.S. Treasury Security

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U.S. Treasury Security

A tradable debt security owed by the United States government for a certain stated period. Each note has a stated interest rate which is paid semi-annually. Because the United States is seen as a very low-risk borrower, many investors see Treasury security interest rates (especially 10-year Treasury notes) as indicative of the wider bond market. Normally, the interest rate decreases with greater demand for the securities and rises with lower demand. For example, in December 2008, 10-year interest rates were the lowest in history due to deteriorating economic conditions and the consequent desire of investors for low-risk investments. U.S. Treasury securities are sold in auctions, usually once every few weeks. They are secured by the full faith and credit of the United States government. They should not be confused with U.S. savings bonds, which are not tradable, or indirect government obligations, which are not issued by the U.S. government itself. See also: Yield, Bond, Treasury Bond, Treasury Bill, Treasury Note.
References in periodicals archive ?
14) Similarly, when a fixed-rate corporate debt issue is initially sold, it is typically marketed in terms of a yield spread to a particular Treasury security rather than at an absolute yield or price.
The particular triggers of HOEPA are an APR 10 percentage points above the yield on a Treasury security of comparable maturity or closing fees exceeding 8 percent of the loan amount.
All Treasury security auctions are conducted through the Federal Reserve banks.
The yield on a Treasury security is the constant interest rate at which the present discounted value of future coupon and principal payments equals the current price of the security.
In 1985, the cost of a transaction involving a physical, marketable Treasury security was about $20; in 1991, the cost of completing a Treasury Direct transaction was about $2.
As the right panel shows, the price of a Treasury security must satisfy the ultimate holders of securities (pension funds, insurance companies, mutual funds, and the general investing public), seen as the intersection of their downwardly sloped demand schedule with the vertical Treasury supply schedule.