What a bond yield is

A bond yield is the return you earn on a bond at its current price, written as a percentage. It is not the same as the coupon, which is the fixed interest the bond was issued with. The coupon never changes; the yield changes every trading day, because it depends on the price the bond is trading at right now. Buy a bond cheaper than its face value and your effective return, the yield, is higher; pay more and the yield is lower.

The seesaw: price up, yield down

This is the one rule that trips everyone up. Bond prices and yields move in opposite directions. Think of a bond paying a fixed 5 dollars a year. If it trades at 100 dollars, that is a 5 percent yield. If demand pushes the price up to 125, the same 5 dollars is now only a 4 percent yield. If the price falls to 80, the 5 dollars becomes a 6.25 percent yield. The payment is fixed, so the only way the return can change is through the price, and it moves the other way. When you read that yields rose, it means bond prices fell, often because investors sold.

More than one kind of yield

When people say yield they usually mean yield to maturity, the total return if you hold the bond to the end, counting both the interest and any gap between the price you paid and the face value repaid. A simpler measure, the current yield, is just the annual interest divided by the price. For a quick read of the market, the yield to maturity on the 10-year Treasury is the figure that gets quoted, and it is the one our rates page tracks.

Why the 10-year Treasury is the one to watch

The US government borrows by selling Treasuries, and the 10-year note is the most watched of them all. Its yield is treated as the benchmark long-term rate, the floor that almost every other long-term borrowing cost is built on. Corporate bonds, and the valuations investors put on stocks, are measured against it. It is also a mood ring for the economy: a rising 10-year yield often signals expectations of stronger growth or more inflation, a falling one the reverse.

How it reaches your mortgage

Here is the part that touches most people. The 30-year fixed mortgage rate tracks the 10-year Treasury yield, not the Federal Reserve's short-term rate. Lenders fund mortgages by selling mortgage-backed securities, which compete with Treasuries for the same investors. When the 10-year yield rises, lenders must offer higher mortgage rates to attract money; when it falls, mortgage rates tend to follow. The mortgage usually sits a few percentage points above the 10-year yield, and that gap, the spread, can widen or narrow on its own. This is why the Fed can cut and mortgage rates can still rise; see how the Federal Reserve works.

Where it sits now

As of 9 October 2026 the 10-year Treasury yielded 5.24 percent, up about 1.1 percentage points over the previous year, a large move for this benchmark. We keep the current level, with its source and date, on the rates and returns page. For how bonds fit alongside shares, see stocks vs bonds; for why yields rise with inflation fears, see what is inflation.

The bottom line

A bond yield is simply the return at today's price, and it moves opposite to that price. Of all yields, the 10-year Treasury is the one worth watching, because it sets the tone for mortgages, corporate borrowing and the value of shares. Follow it, and you will often see where the cost of money is heading before the headlines catch up. The glossary defines the terms.