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||1.72||1.97||2.45|
|91-day T-bill auction avg disc rate||1.90||2.04||2.04|
|182-day T-bill auction avg disc rate||1.84||2.01||2.19|
|Two-Year Treasury Constant Maturity||1.50||1.83||2.61|
|Five-Year Treasury Constant Maturity||1.42||1.83||2.73|
|Ten-Year Treasury Constant Maturity||1.55||2.08||2.85|
|One-Year CMT (Monthly)||1.96||2.00||2.39|
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.