What is a 5 year Treasury yield?

The 5 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 5 years. The 5 Year treasury yield is used as a reference point in valuing other securities, such as corporate bonds. The 5 year treasury yield is included on the longer end of the yield curve.

What is a bond yield?

Put simply, a bond yield is the return on the capital invested by an investor. Bond yields are different from bond prices—both of which share an inverse relationship. The yield matches the bond's coupon rate when the bond is issued. Bond yields can be derived in different ways, including the coupon yield and current yield.

Is the 10-year Treasury yield a key metric to watch?

As of 02:59PM EST. Market open. Analyzing the November jobs report released Friday morning, Commonwealth Financial Network CIO Brad McMillan spotlights the 10-year Treasury yield (^TNX) as a key metric to watch. He explains how yields have climbed on assumptions of imminent interest rate cuts by the Fed and expected economic slowdowns.

How do you calculate yield to maturity?

A bond's yield to maturity is equal to the interest rate which makes the present value of all a bond's future cash flows equal to its current price. These cash flows include all the coupon payments and maturity value. Solving for YTM is a trial and error process that can be done on a financial calculator, but the formula is as follows: