The 20-year bond yield represents the annualized return an investor receives for holding a government security with a two-decade maturity. It serves as a critical benchmark for long-term interest rates and reflects investor sentiment regarding future inflation and economic growth. Changes in this yield can influence mortgage rates and corporate borrowing costs over similar durations, acting as a barometer for the health of the long-term credit market.
The yield is determined through a competitive bidding process at government auctions where the price is set based on market demand. It is calculated as the internal rate of return (IRR) that equates the present value of future coupon payments and principal repayment to the bond's current market price.
| Date | Actual | Forecast | Surprise |
|---|---|---|---|
| Feb 27, 2024 | 3.08 | — | — |
