Treasury note

A Treasury note is US government debt with an original maturity between two and ten years, paying a fixed coupon every six months until it matures, at which point the US Treasury repays the full par value. Common maturities include two, three, five, seven, and ten years, with the ten year Treasury note being the most closely watched benchmark in the entire bond market.

Treasury notes sit in the middle of the US government debt maturity spectrum, longer than Treasury bills but shorter than Treasury bonds, and they carry more interest rate risk than a bill because of their longer duration, while still being considered essentially free of credit risk since they are backed by the full faith and credit of the US government. Their yields move based on expectations for economic growth, inflation, and Federal Reserve policy over the relevant time horizon.

The ten year Treasury note in particular functions as a reference point across the entire financial system, used to price everything from mortgage rates to corporate bond yields to the discount rate applied in many stock valuation models. When financial media discuss the ten year yield without further specification, they are almost always referring to this Treasury note, making it one of the most quoted single numbers in all of investing.