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10 Year Treasury Note

Brian Ronaghan Apr 29, 2020

The 10-year treasury note is a bond issued by the United States government. When an investor buys one, she or he is effectively making a loan to the U.S. government. At the time of initial sale, or auction, an interest rate is set.

This interest rate doesn’t change, but since the T-Note can be resold to other investors at a higher or lower price, the YIELD will.

In a bull market, when there are plenty of high-performing investments, the market price for a treasury note is low, and thus the yield is high. When things are bad in the markets, investors flock to the safety of a bond backed by the U.S. Government, and thus prices for the T-Note go up, sending the yield lower.

Thus, the Yield on the 10-Yr T-Note is often used as an indicator of how investors feel about the future of the economy. That, plus the 10-Yr T-Note is the benchmark that guides many other types of every day interest rates such as fixed mortgages and bank returns.

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