US government debt markets

The money market

The market for debt which matures over a period of one year or less. New York City has the world's largest money market, followed by London and Tokyo.

Treasury bills

A form of short-term government debt sold on the money market. Auctions of 91-day and 182-day bills are held weekly by the Treasury, using the Federal Reserve as its agent. Their yields are watched closely as an indicator of short-term interest rate trends. The 52-week bill is issued every month.

Repos

Short for repurchase agreement, this is the most common type of money market operation. A repo is the equivalent of a short-term loan. A bond is sold with an agreement to buy it back later at an agreed price and usually at a stated time. For the Fed, repos are the only way to offset drains on bank reserves.

The bond market

The market for debt which matures over a period of one year or more. The US Treasury issues bonds through the Federal Reserve. US government debt is issued as bonds (of 30-year maturity), notes (with maturities of between two and 10 years) and bills (with maturity of less than one year).

Treasury bonds

Bond with maturities of 30 years at issue. The most recent issue is known as the long bond. Also referred to as T-bonds or simply Treasuries. The yield on 30-year T-bonds is watched closely as an indicator of long-term interest rates.

Treasury notes

Intermediate securities with maturities from two to 10 years. The two- and five-year notes are issued every month, the three- and 10-year notes every quarter.

Treasury bills

Short-term securities with maturities of one year or less, traded on the money market. Auctions of 91-day and 182-day bills are held weekly, and their yields are watched closely as an indicator of short-term interest rates. The 52-week bill is issued every month.