Investors and those following the movement of interest rates look at the movement of Treasury yields as an indicator of things to come. Their rates are considered an important benchmark: Because Treasury securities are backed by the full faith and credit of the U.S. Treasury, they represent the rate at which investment is considered risk-free.
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|This week||Month ago||Year ago|
|One-Year Treasury Constant Maturity||0.08||0.08||0.73|
|91-day T-bill auction avg disc rate||0.03||0.07||1.16|
|182-day T-bill auction avg disc rate||0.05||0.07||1.01|
|Two-Year Treasury Constant Maturity||0.11||0.11||0.71|
|Five-Year Treasury Constant Maturity||0.59||0.45||0.77|
|Ten-Year Treasury Constant Maturity||1.37||1.12||1.02|
|One-Year CMT (Monthly)||0.10||0.10||1.41|
Since investors in riskier investments command a higher return as compensation, the yields on many bonds and money market instruments are priced at a spread over the corresponding risk-free Treasury rate. Yields on money markets and certificates of deposit are often priced relative to yields on Treasuries of a similar length. Adjustable rate mortgages can be indexed to the one-year Treasury. Fixed mortgage rates are closely linked to movements in long-term Treasury yields, as mortgages are often packaged together and sold as mortgage-backed bonds. Yields on short-term Treasuries can behave differently from yields on longer-term Treasuries.