What is the difference between U.S. Treasury bills, notes and bonds ?
The names correspond with the varying maturity periods. U.S. Treasury bills have the shortest terms, of one year or less. They are usually issued with maturities of one month, three months, six months or one year. U.S. Treasury notes have maturities of two, three, five or 10 years U.S. Treasury bonds have terms of more than 10 years, but are usually issued with a maturity of 30 years. The market for these “long bonds” is highly liquid, so the yield is often used to judge long-term interest rates. Are they all sold with interest coupons ? No, Treasury bills are sold at a discount to their face value, just like “zero-coupon” or “stripped” bonds. Notes and bonds pay interest twice a year. Has there ever been a default on a U.S. government borrowing ? Not yet. The United States seems prepared to run a massive deficit to stimulate the economy. How big will it be in proportion to the overall economy ? If the United States runs a $1.5-trillion (U.S.) deficit next year, as some people expect,
