Recently, one of the words investors have heard the most is “US bond yield.” The 10-year US Treasury yield continuously exceeded 2.5% and 2.8%. The global stock market was affected by this, and all showed significant fluctuations. The rise in US bond yields appears to be the “main culprit” of the market decline. What exactly is the US Treasury yield? What impact does its rise and fall have on the financial market? Today we're going to have a chat with all of you.
What is the US Treasury yield?
US bonds, or US Treasury bonds, are national bonds issued by the US Treasury on behalf of the government. Generally speaking, America's IOUs to borrow money from around the world are treasury bonds. Dollar endorsements are the greatest credit protection for US bonds, so US Treasury bonds are regarded by the market as risk-free bonds.
The US government borrows money through fixed term medium- and long-term bonds (such as 2-year, 5-year, 10-year, and 30-year terms) issued at a fixed interest rate determined by the current interest rate in the market at the time the bond was issued. Generally speaking, the longer the maturity period, the higher the coupon rate, because the longer the period, the greater the risk of uncertainty, the higher the risk premium as compensation.
US bond yield refers to the return on earnings obtained from holding a bond until the agreed period, depending on the face value of the bond, interest, and current bond market price. Generally, for bonds that have already been issued, the interest and face value are fixed, then the yield to maturity of the bond is negatively correlated with the bond price, that is, the bond yield rises and the bond price falls. The 10-year US bond is for all maturities...