What does the phrase “backed by the full faith and credit of the U.S. government” refer to?
A. This refers to the unconditional guarantee of the U.S. government to pay interest and repay principal on certain obligations, which include U.S. Treasury bills, U.S. Treasury notes and U.S. Treasury bonds. Securities issued by the Government National Mortgage Association (“GNMA”) are also backed by the U.S. government and are the only U.S. government agency-issued securities to be so guaranteed. All other U.S. government agency issues are backed by the issuing agencies themselves, but not unconditionally.
