US Treasury bond yields are among the most-watched numbers in global finance — they set the baseline price of money. Here is what yields are, how they form and what they signal.
What Yields Are
A yield is the return a bond investor earns. For T-bills it is the discount return; for longer bonds it combines coupon and price change. When prices fall, yields rise (and vice versa).
How They Are Set
Auction demand sets yields — high demand pushes prices up and yields down. The Fed drives short-end expectations; inflation and growth drive the long end.
The Yield Curve
Short vs long yields form a curve. An inverted curve (long below short) has historically warned of recession risk — a widely watched signal.
Why It Matters to You
Treasury yields guide mortgage rates, savings yields and bond prices worldwide — and move the dollar.
FAQ
Why do yields rise when the Fed tightens?
Higher policy rates push the whole short-end curve up.
Is a rising yield good or bad?
Mixed — it rewards savers but raises borrowing costs and pressures equities.
Related: Bonds and Gold and T-Bill Rates.