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Why does Interest in Treasuries Impacts Rates of interest?

Brand new U.S. Treasury Agency sells expenses, cards, and you can ties in the auction to pay for brand new You.S. financial obligation, form see your face value and you can interest.

Treasury cards is actually secure than just about any almost every other bond due to the fact You.S. bodies claims them regarding default. The fresh new smaller go back (i.elizabeth., this new ten-season Treasury note exchanged around step 1% to possess most of 2020) is actually counterbalance by tall coverage of your investment.