government bond
- Noun:
- A debt security issued by a national government: A "government bond" is a formal, interest-bearing loan made by an investor to a government. The government promises to repay the borrowed money (the principal) on a specified future date (maturity) and to make periodic interest payments (coupons) until that date. It is considered a core instrument of public finance.
Primary Usage: The term is used to describe the specific financial instrument itself, emphasizing its nature as a sovereign debt obligation.
- The Ministry of Finance announced the sale of a new 10-year government bond.
- Pension funds often invest heavily in government bonds for stability.
Contextual Usage: It is used when discussing investment safety, portfolio allocation, or macroeconomic policy.
- In times of economic uncertainty, investors flock to the safety of government bonds.
- The central bank's decision to buy government bonds lowered long-term interest rates.
"to be a bellwether for the government bond market": Refers to a specific bond (often a long-term one) whose yield is seen as a key indicator for the entire sovereign debt market.
- The 30-year Treasury bond is a bellwether for the U.S. government bond market.
"government bond auction": The formal process through which a government sells new bonds to primary dealers and investors.
- Demand was strong at yesterday's government bond auction.
Treasury bond (T-bond): Specifically, a long-term U.S. government bond with a maturity of 20 to 30 years.
- He holds a portfolio of Treasury bonds and bills.
Sovereign bond: A broader term for a bond issued by a national government, often used in an international context.
- The country's sovereign bonds were downgraded by the rating agency.
Government securities: A wider category that includes government bonds as well as shorter-term debt instruments like Treasury bills and notes.
- Treasury security (specifically for U.S. bonds)
- Sovereign debt (broader, can include other forms of government borrowing)
- Gilt (specifically for U.K. government bonds)
Government bond yield: The effective rate of return on a government bond, which moves inversely to its price.
- Falling government bond yields signaled expectations of slower economic growth.
Government bond market: The marketplace where government bonds are issued and traded.
- Liquidity in the government bond market is essential for financial stability.
- Risk-free rate: A theoretical concept often based on the yield of a highly rated, short-term government bond, representing an investment with zero risk of default.
- The yield on the 3-month T-bill is frequently used as a proxy for the risk-free rate.
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a bond that is an IOU of the United States Treasury; considered the safest security in the investment world
