A par yield is the yield a Treasury security would pay if it sold at its face value. The Treasury publishes one for each maturity, from one month to thirty years, on every business day it prints a curve. The 10-year point is the yield for a security that matures in ten years.
A yield moves opposite to the price of the bond: when buyers pay more for Treasury securities already issued, the yield falls, and when they pay less, it rises. A yield is not a forecast, and this paper does not compute a change the Treasury did not print.
The Federal Reserve sets a target range for the federal funds rate, an overnight rate between banks. The 10-year Treasury yield is a market yield on a ten-year security, so it can move on its own between meetings. The Fed rates page charts the two together.
- Par yield
- The yield a Treasury security would pay if it sold at its face value.
- Yield curve
- The yields on securities of different maturities, from the shortest to the longest.
- Maturity
- The date a Treasury security repays its face value. A 10-year note matures in ten years.
