The current 10-year US treasury yield is 4.5% (4/11/2025). A speculator (A) believes the Fed will not cut rates, but a rate cut is coming at the end of the year, and the 10-year yield should be at 4.4% within 6 months. Another speculator (B) believes the 10-year yield should be at 4.1% within 6 months (2 rate cuts by September 2025).
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5% as of April 11, 2025. Show more…
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As you can see by clicking on the above link, the going yield-to-maturity on a 10 year US Treasury bond is about 4.47% (as of Monday morning). Does this mean that an investor who buys this bond today will earn a rate of return of 4.47% with certainty or at least something close to that? Why or why not? HINT: As you address this question, keep in mind that any intuition about loans you have from home mortgages can also be usefully applied here.
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