What Is a Treasury Bond and Why Should You Care? A Treasury bond is basically an IOU from the U.S. government. You lend Washington money, and they promise to pay it back with interest. These bonds are considered very low-risk—after all, the government can always print money to pay you back. That’s why the bond market is central to everything in the economy. Mortgage rates, car loans, corporate borrowing—all of it is tied, in some way, to what happens in the Treasury market. If demand for bonds falls, the government has to raise the interest rate it pays to attract buyers. If rates rise too fast, borrowing across the economy becomes more expensive. What Are Bond Yields and Why Are…
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