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Treasury notes are 2 year, 5 year, 10 year and 30 year obligations of the US governmen and may be purchased at auction directly from the U.S. Treasury or through primary dealers (a series of investment banks).
Issue / Term | Maturity Date | Coupon | Price* | Yield |
2 Year Treasury |
1/31/2012 |
0.87% |
99-29 |
0.92% |
3 Year Treasury |
2/15/2013 |
1.375% |
99-20 |
1.49% |
5 Year Treasury |
1/31/2015 |
2.25% |
99-02 |
2.45% |
10 Year Treasury |
2/15/2020 |
3.625% |
98-24 |
3.77% |
30 Year Treasury |
2/15/2040 |
4.625% |
98-24 |
4.70% |
There is a very vibrant secondary market for Treasury notes, ensuring liquidity. However, Treasury notes shsould not be viewed as cash equivalents as they may lose value quickly and dramatically if interest rates rise.
Following the Federal Reserve annoucement on March 18, 2009 that it would purchase up to $300 billion in long-dated Treasuries, Treasury yields fell dramatically. With that reality against the backdrop of inflation on the horizon, many observers believe that longer dated Treasuries are not currently a good store of value for investors.
The purchase of longer duration Treasury bonds near maturity at a premium in secondary markets can provide tax losses on maturity - a positive tax attribute that can offset gains that you may have.