Bonds & Rates
Bond prices and yields usually move in opposite directions
A bond promises contractual cash flows subject to the issuer’s ability to pay. Its price is what the security trades for; its yield is a rate implied by that price and the scheduled cash flows under stated assumptions. When the required yield rises, the present value of fixed cash flows generally falls.
Explainer Reviewed 08-21-2026
What it is for
This relationship helps separate a bond’s coupon from its market yield and an official constant-maturity curve from a specific security. Maturity, duration, credit quality, call features and liquidity affect how a bond responds.
What it cannot tell you
Yield is not a guaranteed realized return. Reinvestment, default, calls, taxes, transaction costs and sale before maturity can change the outcome. A constant-maturity Treasury observation is not a price quote for a particular note.
How to verify the object
For a security, open the prospectus or offering document and confirm coupon, maturity, call terms and identifier. For official Treasury curve observations, use the dated Treasury table and keep every tenor on the same row and trade date.
Further reading
Recommended reading
Independent bookstore picks via Bookshop.org. Education first — not a shopping mall.
Recommended reading
The Bond Book
3rd Edition (McGraw-Hill, 2010)
- Why
- Plain-English map of Treasuries, munis, corporates, zeros, and bond funds for fixed-income literacy.
- Best for
- Readers after bond prices/yields or Treasury CMT Learn notes.
- Limitation
- 2010 vintage — still useful for product taxonomy; pair with current Fed/Treasury prints for rates.
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Education only. Not individualized advice.