Definition

Noun: - A medium-term debt obligation issued by the U.S. Department of the Treasury, with a fixed maturity period ranging from one to ten years. Treasury notes pay a fixed rate of interest every six months until maturity, at which point the face value is repaid to the holder. They are sold to fund government operations and are considered one of the safest investments due to the full faith and credit of the U.S. government.

Usage

• Treasury notes are a core component of government financing and the fixed-income market.
• They are typically discussed in contexts of investment, public debt, monetary policy, and financial markets.

Examples

• The investor diversified her portfolio by purchasing a treasury note with a five-year maturity.
• The government raised funds through the auction of new treasury notes.
• The interest rate on the 10-year treasury note is a key benchmark for mortgage rates.

Advanced Usage

• "On-the-run" treasury note: Refers to the most recently issued treasury note of a specific maturity, which is typically the most liquid.
  • Traders prefer the on-the-run 2-year treasury note for its high liquidity.
• "Off-the-run" treasury note: Refers to treasury notes that were issued earlier and are no longer the most current issue for their maturity.
  • Off-the-run treasury notes sometimes trade at a slight discount to on-the-run notes.

Variants and Related Words

• Treasury security (n): A broader category of U.S. government debt, which includes Treasury bills (maturities of one year or less), treasury notes (1-10 years), and Treasury bonds (maturities greater than 10 years).
• T-note (n): A common abbreviation for treasury note.
• Coupon (n): The fixed annual interest rate paid by a treasury note, expressed as a percentage of its face value.

Synonyms

• Government note: A direct synonym.
• Sovereign debt: A broader term for debt issued by a national government, which includes instruments like treasury notes.

Related Phrases

• "Auction of treasury notes": The primary method by which the U.S. Treasury sells new notes to the public and institutional investors.
  • The results of yesterday's treasury note auction influenced bond market prices.
• "Yield on a treasury note": The effective annual rate of return earned on the note, which can fluctuate with market prices after issuance.
  • The yield on the 7-year treasury note rose sharply following the economic report.

Noun

1. securities with maturities of 1 to 10 years; sold for cash or in exchange for maturing issues or at auction