Treasury Bonds

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SeekingAlpha  May 14  Comment 
Wall Street Journal  May 12  Comment 
Many money managers believe that the recent selloff isn’t sustainable, pointing to two key differences with the events of 2013’s “taper tantrum”: tempered economic expectations and more-balanced positioning by investors.
Wall Street Journal  May 12  Comment 
U.S. Treasury bonds rallied Tuesday and eliminated an earlier selloff as buyers stepped in after the yield on the benchmark 10-year note hit a six-month high.
Wall Street Journal  May 11  Comment 
U.S. Treasury bonds tumbled again Monday, sending the yield on the benchmark 10-year note to the highest closing level in more than five months.
Financial Times  May 6  Comment 
UK interdealer broker aims to woo hedge funds and corporations with new trading venue
Reuters  Apr 22  Comment 
Stocks in major markets drifted higher on Wednesday as investors took an optimistic view of the latest batch of U.S. corporate earnings, while U.S. Treasury prices declined after home sales data added to anticipation of a rate hike by the U.S....




 
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Treasury bills, notes, and bonds are examples of default-free securities. Treasury bonds (T-Bonds, or the long bond) have the longest maturity, from ten years to thirty years. They have coupon payment every six months like T-Notes, and are commonly issued with maturity of thirty years.

Treasury notes and bonds operate differently from a Treasury Bill. A note denotes a security with a date of maturity larger than one year up to ten years. A bond is a security that exceeds ten years in maturity. Notes are offered in lengths of two, three, five, and ten years. Bonds are only offered in a length to maturity of thirty years.

Treasury notes and bonds pay coupon payments every six months including the final date of maturity. For example, if you purchased a $100,000 two-year Treasury note on January 15 2008 at an annual rate of 5%, then your income stream would look like this:

Date Income ($)
7/15/08 2,500
1/15/09 2,500
7/15/09 2,500
1/15/10 102,500

A stock chart for the 30 YR T-Bond



Inflation-Protected Treasury Notes and Bonds

The U.S. government also offers inflation-indexed notes and bonds, also known as TIPS (Treasury Inflation-Protected Securities). They are offered in lengths of five, ten, and twenty years to maturity. While the interest-rate payments stay the same, they are applied to the principal, which is adjusted for inflation every six months.

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