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10-Year Treasury
About This Indicator
What Is the 10-Year Treasury?
What it costs the federal government to borrow for ten years: in effect, the market's expected short-term rates over the next decade plus a premium for tying money up that long.
Why Does It Matter?
This is the long rate: mortgage rates track it, and much corporate borrowing is priced off it. When it rises, existing bonds lose value, as do retirement funds holding them.
Can Politics Influence It?
Indirectly. Heavy borrowing pushes the yield up; credible inflation policy pulls it down. The buyers are the world's savers, not an administration, and the Fed reaches it only through expectations of its moves and, at times, large bond purchases.
Key Idea
The yield's slide from above 15% in 1981 to under 1% in 2020 ran through administrations of both parties and through deficits and surpluses alike: inflation and the world's appetite to save move it more than any budget.
Not Scored
Source: FRED (Federal Reserve H.15). GS10 and TB3MS; M1329BUSM193NNBR (Banking and Monetary Statistics, Table 122) for the bill in 1931-1933.
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