A U.S. Treasury is a loan to the U.S. government. The yield is the return an investor earns if they buy the bond at today's price and hold it.
Bond prices and yields move in opposite directions: when prices rise, yields fall, and vice versa.
Yields are watched closely because they influence mortgage rates, borrowing costs and how investors compare assets — including gold, which pays no interest.
Key definitions
- Yield
- The annual return implied by a bond's price and coupon.
- Yield curve
- A line plotting yields across maturities.
- Real yield
- Nominal yield minus expected inflation (approximately).
Key takeaways
- Price and yield move inversely
- An inverted curve has historically drawn attention as a possible slowdown signal
- Real yields are one lens analysts use to study gold