A debt security issued by the U.S. Department of the Treasury with maturities ranging from 10 to 30 years, paying semiannual interest and backed by the full faith and credit of the U.S. government.
Treasury bonds (T-bonds) are considered among the safest investments in the world because they are backed by the U.S. government's taxing power. The 10-year Treasury yield is the most closely watched bond rate, serving as a benchmark for mortgage rates, corporate bond pricing, and stock valuations. Treasury bonds provide a predictable income stream and tend to rise in value when stocks fall, making them a key portfolio diversifier. Other Treasury securities include T-bills (maturities under 1 year), T-notes (2 to 10 years), and TIPS (inflation-protected). Treasury interest is exempt from state and local income taxes.