What Is a 10-Year Treasury Note?

The 10-year Treasury note is a debt obligation issued by the U.S. government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest a꧋t a fixed rate every six months and pays the face value to the holder at maturity. The U.S. government partially funds itself by issuing these notes.

How 10-Year Treasury Notes Work

The U.S. government issues three types of debt securities to fund its obligations: 澳洲幸运5官方开奖结果体彩网:Treasury bills, Treasury notes, and Treasury bonds. Bills, bonds, and notes are distinguished by their length of maturit🐼y.

Treasury bills (T-bills) have the shortest lengths of time to maturity—one year or less. The Treasury offers T-bills with maturities of four, eight, 13, 26, and 52 weeks. Treasury notes have maturities ranging from one to 10 years. Bonds are Treasury securities with maturities longer than 10 years.

Treasury notes and bonds pay interest at a fixed rate every six months to maturity. They're then redeemed at 澳洲幸运5官方开奖结果体彩网:par value. The Treasury repays the principal it borrowed.

T-bills are issued at discounts to par, and they don't have coupon payments. The interest on T-bills is the difference between the face value repaid at maturity and the purchase price.

The 10-Year Note Yield As a Benchmark

The 10-year T-note is the most widely tracked government debt instrument. Its yield is frequently used as a benchmark for other interest rates, like mortgage and corporate debt. Commercial interꩵest rates don't follow the 10-year yield, however.

The chart below shows the historical 10-year Treasury yield from March 2022 to April 2025. Since March 2022, the 10-year Treasury yield has seen a general upward trajectory, blotted with fluctuations. The upward trajectory is a result of the Federal Reserve increasing interest rates to curb the high 澳洲幸运5官方开奖结果体彩网:inflation experienced after the COVID-19 pandemic.

The interest rate set by the Fed increased from a range of 0.25% and 0.50% in March 2022 to a range of 5.25% and 5.50% in July 2023, with rates only starting to slightly come down in September 2024.

The yield of the 10-year note went from about 1.7% in March 2022 to a peak of 4.98% in October 2023. As of April 2025, the rate is about 4.4%.

The 10-year note is undoubtedl🉐y a highly significant benchmark for global financial markets. A rising yield indicates investor confidence in the economy but also suggests higher borrowing costs, potentially slowing economic growth. Conversely, a falling yield may signal economic uncertainty.

What Impacts the 10-Year Treasury Yield?

Several factors influence the 10-year Treasury yield. It's directly affected by investor 澳洲幸运5官方开奖结果体彩网:confidence in the markets. When investors are optimistic about the economy's health, they tend🔯 to invest in riskier assets, reducing demand for Treasury n🦩otes, causing a need to increase their yield.

Conversely, in times of economic uncertainty, investors often flock to the sa𒈔fety of Treasury notes, drivౠing up their prices and lowering them.

Inflation is another major influence, as we have seen more recently. Higher inflation can decrease the real return on Treasury notes, causing yields to rise as investors demand higher returns to offset the erosion of buying power. Conversely, low inflatio🍒n can lead to lower yields.

Lastly, the yield is also affected by monetary policy decisions by th♓e Federal Reserve. For instance, when the Federal Reserve chooses to ra🤡ise interest rates, yields on Treasury notes also tend to increase, reflecting the higher cost of borrowing.

The Advantages of Investing in Treasury Notes

Fixed-income securities offer important portfolio 澳洲幸运5官方开奖结果体彩网:diversification bene✃fits because their returns aren't correlated with the performance of stocks.

T-Notes Are Safe: Government debt and the 10-year Treasury note, in particular, are considered among the safest investments. Its price often (but not always) 澳洲幸运5官方开奖结果体彩网:moves inversely to the trend of the major stock market indexes. Central banks tend to lower interest rates in a recession, which reduces the coupon rate on new Treasuries. This then ൲makes older Treasury securities with higher coupon rates more desirable.

T-Notes Are Partially Tax-Exempt: Another advantage of investing in 10-year Treasury notes and other federal government securities is that the coupon payments are exempt from state and local income taxes. They're still taxable at the federal level, however.

There's No Minimum Holding Term: Investors can choose to hold Treasury notes until maturity or sell them early in the secondary market. There's no minimum holding term.

The Disadvantages of🌠 Investing in Treasury Notes

Investing in Treasury notes, while consid🌼ered safe, comes with drawba𒊎cks.

Lower Rate of Return: Treasury notes can yield less than riskier assets like equity investments or higher-yielding corporate bonds. This makes them potentially less profitable for investors♏ than alternatives.

Inflation Risks: During periods of high inflation, fixed-interest payments from Treasury notes can lose purchasing power. If inflation outpaces the yield൲, the real return can turn negative. If you are holding longer-running notes, you need to ensure you understand how i🌌nflation will affect your investment.

Interest Rate Risk: An uptick in interest rates could lower the value of existing T﷽reasury notes. This could result in capital losses should you liquidate your holdings before their maturity date.

How to Buy 10-Year Treasury Bonds

The 澳洲幸运5官方开奖结果体彩网:U.S. Treasury sells its notes, bonds, and bills through the TreasuryDirect website. Sales are done through competitive or non-competitive bidding with a minimum purchase of $100, with bidding increasing in $100 increments. Treasury securities can also be bought through a bank or broker.

The Bottom Line

A 10-year Treasury note pays interest at a fixed rate twice a year and will pay its face value at maturity. They are issued by the U.S. government and provide low-risk investments, and they're generally tax-exempt at the state and local levels. T-notes can be a good choice for those who prefer not to roll the dice with more iffy investments.