📖 Understanding Bonds & Treasuries

Treasury bonds are loans you make to the U.S. government. In return, they pay you interest (the "yield"). Treasuries are considered the safest investments because they're backed by the full faith of the U.S. government. This dashboard tracks real-time yields, the yield curve shape, key spreads, and popular bond ETFs.

What sets bond yields? Several key factors drive treasury yields up or down:

• Federal Reserve policy: The Fed sets the federal funds rate, which directly influences short-term yields. When the Fed raises rates, short-term bond yields rise. When they cut, yields fall.
• Inflation expectations: Investors demand higher yields when they expect inflation to erode their purchasing power. Rising inflation = rising yields. This is why CPI reports move the bond market.
• Supply and demand: When the government issues more debt (higher deficits), more supply pushes yields up. When investors flock to safety (during market crashes or geopolitical crises), demand rises and yields fall — this is the "flight to safety" effect.
• Economic growth outlook: Strong economic data pushes yields higher (investors expect rate hikes and sell bonds). Weak data or recession fears push yields lower (investors buy bonds for safety).
• Global rates: U.S. treasuries compete with bonds worldwide. If European or Japanese yields rise, some capital flows out of U.S. bonds, pushing American yields up to stay competitive.

Why it matters: Bond yields affect everything — mortgage rates, stock valuations, and the economy. When yields rise, bond prices fall (and vice versa). The yield curve shape (normal vs. inverted) is one of the most watched recession indicators.