Reference · Institutions
U.S. Department of the Treasury
The issuer of U.S. government securities and manager of federal finances.
The U.S. Department of the Treasury manages federal government finances, issues marketable Treasury securities (bills, notes, bonds, TIPS, and floating-rate notes), and publishes fiscal and debt data. For investors, the Bureau of the Fiscal Service administers TreasuryDirect for direct purchases of Treasury securities, while the Office of Debt Management publishes auction results and the Treasury's borrowing schedule.
Direct Answer
The U.S. Treasury issues all marketable Treasury securities: bills (4 to 52 weeks), notes (2 to 10 years), bonds (20 and 30 years), Treasury Inflation-Protected Securities (TIPS), and floating-rate notes (FRNs). Investors can buy at auction directly through TreasuryDirect or purchase in the secondary market through a broker. The Treasury publishes auction results, yield data, and the Treasury's monthly statement on fiscal.treasury.gov.
Treasury security types
The U.S. Treasury issues five types of marketable securities, each with distinct maturity, pricing, and coupon characteristics.
Treasury bills (T-bills) are the shortest-term instruments, with original maturities of 4, 8, 13, 17, 26, and 52 weeks. They are issued at a discount to face value and pay no periodic coupon. The investor's return is the difference between the purchase price and the face value received at maturity. Discount pricing means a bill maturing in 26 weeks and purchased at $990 will return $1,000 at maturity, with the $10 difference representing the investor's entire return. T-bill yields are quoted on a bank-discount basis in the auction and on a bond-equivalent basis for comparison with coupon securities.
Treasury notes have original maturities of 2, 3, 5, 7, and 10 years. They pay a semi-annual coupon at the rate set at auction (the coupon rate equals the stop-out yield for newly issued notes), with face value returned at maturity. Notes trade actively in the secondary market and are benchmarks for pricing a wide range of other fixed-income instruments. The 10-year Treasury note yield is widely cited as the risk-free rate reference for long-duration asset valuation.
Treasury bonds are issued at 20-year and 30-year original maturities and pay semi-annual coupons like notes. The 30-year bond (the "long bond") carries the most interest-rate sensitivity of any standard Treasury instrument. A rise of one percentage point in yields will move a 30-year bond's price far more than it will move a 2-year note's price, due to the longer duration.
Treasury Inflation-Protected Securities (TIPS) are issued at 5, 10, and 30-year maturities. The principal balance is adjusted up or down each month based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). The semi-annual coupon is a fixed percentage of the adjusted principal, so both the principal and coupon payments change with inflation. At maturity, TIPS holders receive the greater of the adjusted principal or the original par value, providing a deflation floor. TIPS yields represent the real yield: the return after inflation, as distinct from the nominal yield on conventional Treasuries, which embeds inflation expectations.
Floating-rate notes (FRNs) are issued at 2-year maturities. Their coupon payments reset weekly and are indexed to the 13-week T-bill rate determined at the most recent T-bill auction, plus a fixed spread set at issuance. FRNs appeal to investors who want credit quality comparable to T-bills with protection against rising short-term rates, without the interest-rate risk of longer-duration fixed-rate instruments.
How Treasury auctions work
The Treasury announces upcoming auctions in advance through the auction calendar published on treasurydirect.gov. The announcement specifies the security type, maturity, size (par amount to be issued), auction date, issue date, and maturity date. Investors can monitor the auction calendar to anticipate issuance and plan purchases accordingly.
Two types of bids are accepted: competitive and non-competitive. Competitive bids specify a yield (for notes, bonds, TIPS, and FRNs) or a discount rate (for bills) and a quantity. Non-competitive bids specify only a quantity and agree to accept whatever yield is determined at auction. The auction is sealed-bid: all competitive bidders submit their bids before the deadline without knowing what others are bidding.
The Treasury fills non-competitive bids first (up to $10 million per account per auction for most securities). It then fills competitive bids in ascending yield order (lowest yield bid first, since lower yield means a higher price the Treasury pays less to borrow). The stop-out rate (also called the high rate or clearing rate) is the yield at which the auction is fully subscribed. All non-competitive bidders and all competitive bidders who bid at or below the stop-out rate are filled at that single yield. Competitive bidders who bid above the stop-out rate receive no allocation. For notes and bonds, the stop-out rate becomes the coupon rate, rounded to the nearest eighth of a percent.
The when-issued (WI) market is an active forward market that develops between announcement and issuance. When-issued trading reflects price discovery about where the auction will clear. Dealers and investors trade WI securities (which do not yet exist) to hedge or speculate on auction outcomes. The WI yield at auction time is a useful signal of expected demand: if the actual stop-out yield is lower than the prevailing WI yield, it indicates the auction cleared more strongly than expected.
Auction results are published immediately after the close, available on treasurydirect.gov and fiscaldata.treasury.gov. Key metrics in the results include the stop-out yield, the bid-to-cover ratio (total bids submitted divided by the amount offered), the percentage allotted to primary dealers, and the percentage awarded non-competitively. A bid-to-cover ratio above 2.0 is generally considered a sign of healthy demand; a ratio at 2.5 or above suggests strong demand; a ratio below 2.0 for major benchmarks can indicate weak demand and may pressure yields upward in subsequent trading.
TreasuryDirect: buying directly
TreasuryDirect (treasurydirect.gov) is the online platform operated by the Bureau of the Fiscal Service through which individual investors can purchase Treasury securities directly from the government without a broker. Accounts require a U.S. Social Security number, a U.S. bank account for funding and receiving payments, and an address. The account setup process is completed online and the minimum purchase for most marketable securities is $100, with additional purchases in $100 increments.
Through TreasuryDirect, investors submit non-competitive bids on Treasury bills, notes, bonds, TIPS, and FRNs. They are guaranteed to receive an allocation at the auction's stop-out rate. Coupon payments and principal at maturity are credited directly to the linked bank account. TreasuryDirect also administers savings bonds (Series I and Series EE), which are non-marketable and can only be held and redeemed through TreasuryDirect or through a financial institution.
TreasuryDirect has important limitations compared to holding Treasury securities through a brokerage account. Securities held in TreasuryDirect cannot be traded in the secondary market directly from the platform. An investor who wants to sell a Treasury note before maturity must first initiate a transfer to a bank or brokerage (called a transfer of registration), a process that takes several business days and involves paperwork. This makes TreasuryDirect better suited for investors who plan to hold to maturity and primarily want to avoid broker markups on new issues.
For investors who want secondary-market access (the ability to sell before maturity, to buy off-the-run issues, or to purchase in larger lots), holding Treasury securities through a standard brokerage account is more practical. Most major brokers allow commission-free purchases of Treasury securities at auction and make the secondary market easily accessible through their trading platforms.
Treasury data for investors
The Treasury publishes several data series that investors and analysts use regularly.
The Daily Treasury Yield Curve Rates (H.15) are published at home.treasury.gov and show yields for the on-the-run Treasury curve: the most recently issued bills, notes, bonds, and TIPS at standard maturities from 1 month to 30 years. These are the official yield curve data used to price derivatives, calculate spreads, and benchmark fixed-income portfolios. The page also carries the CMT (Constant Maturity Treasury) rates, which are interpolated values at fixed maturities regardless of what has been most recently issued.
The Treasury International Capital (TIC) data, published monthly with a six-week lag, reports foreign holdings of U.S. Treasury securities by country. Investors monitor TIC data for signs of shifting foreign demand, particularly from large creditor nations. A significant reduction in foreign holdings could signal rising yields or currency effects, though the data's lag limits its real-time usefulness.
The Monthly Treasury Statement (MTS), published at fiscal.treasury.gov about 17 business days after each month's close, reports the federal government's total receipts, outlays, and deficit or surplus for the month and fiscal year to date. Investors follow the MTS to track the pace of deficit financing and to gauge Treasury's upcoming borrowing needs, which affect the supply of new securities coming to market.
The Quarterly Refunding process involves the Treasury announcing its borrowing needs and issuance plans each quarter, including any changes to auction sizes or the maturity mix. The refunding announcements, published by the Office of Debt Management, are closely watched for signals about how the Treasury intends to finance the deficit and whether it plans to shift issuance between short-term and long-term maturities.
What the Treasury does not control
The Treasury Department has broad authority over federal fiscal operations, but several areas of economic and financial policy are outside its jurisdiction.
Monetary policy is the Federal Reserve's responsibility, not the Treasury's. The Treasury borrows money by issuing securities; the Fed sets the level of short-term interest rates and manages the money supply through open market operations. The two institutions coordinate on some matters (such as the Fed's role as fiscal agent for the Treasury and the mechanics of Treasury auctions), but they are legally independent entities with separate governance structures.
Securities market regulation falls primarily under the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). The Treasury does not regulate broker-dealers, investment advisers, mutual funds, ETFs, or most aspects of investor protection. The SEC and FINRA handle those functions.
Deposit insurance is provided by the FDIC for bank deposits and the NCUA for credit union deposits, not the Treasury. The Treasury does have the Exchange Stabilization Fund (ESF), which can be used in certain financial emergencies, but routine deposit insurance is an FDIC function.
The Treasury does not directly set mortgage rates or commercial lending rates. Treasury yields influence mortgage rates and corporate borrowing costs through market mechanisms (investors compare returns across asset classes), but the specific rates that consumers and businesses face are set by lenders, influenced by their own cost of funds, credit risk assessments, and competitive conditions.
FAQ
What is the difference between a Treasury bill, a Treasury note, and a Treasury bond?
All three are U.S. government obligations and are considered among the safest dollar-denominated assets, but they differ in maturity. Treasury bills have maturities from four weeks to 52 weeks and are sold at a discount to face value, paying no periodic coupon; the return is the difference between the purchase price and face value at maturity. Treasury notes have maturities from two to ten years and pay a semi-annual coupon. Treasury bonds have maturities of 20 or 30 years and also pay semi-annual coupons. Longer maturities carry more interest-rate sensitivity: a 30-year bond's price will move substantially more than a 4-week bill's when interest rates change.
What are TIPS and how does inflation protection work?
Treasury Inflation-Protected Securities (TIPS) are Treasury obligations whose principal adjusts with changes in the Consumer Price Index (CPI). If inflation rises, the principal increases; if prices fall (deflation), the principal decreases, though at maturity holders receive at least the original par value if deflation has eroded the adjusted principal below par. TIPS pay a fixed coupon rate applied to the inflation-adjusted principal, so the coupon payment itself varies with inflation. The yield on TIPS (called the real yield) represents the return above inflation, unlike nominal Treasury yields which include an inflation expectation component.
How do I read Treasury auction results?
The Treasury publishes auction results on the same day the auction closes at treasurydirect.gov and fiscaldata.treasury.gov. Key figures to understand: the stop-out rate (also called the high rate or high yield) is the yield at which competitive bids were filled, which becomes the coupon rate for notes and bonds; the bid-to-cover ratio measures demand (total bids received divided by the amount offered, with ratios above 2.0 generally considered healthy); and the percentage awarded to primary dealers vs. non-competitive bidders and other investors reflects the distribution of ownership. A high bid-to-cover ratio at a lower-than-expected yield indicates strong demand.
Educational use
This page is educational and informational. It does not tell a reader what to buy, sell, hold, or contribute, and it does not account for an individual's objectives, taxes, legal situation, benefits, debts, time horizon, or risk tolerance. Verify auction terms, TreasuryDirect account requirements, and yield data from current primary sources before acting.