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.