How Treasury Bonds Work: T-Bills, Notes, and TIPS
The US Treasury market is the bedrock of global finance. With more than $27 trillion in outstanding marketable debt, Treasury securities set the baseline for virtually every interest rate in the economy — from your mortgage to your savings account. Whether you are a retiree seeking steady income, a young investor looking for portfolio ballast, or simply trying to understand what drives the numbers on CNBC's ticker, grasping how these instruments work is essential financial literacy. As of late February 2026, the Treasury yield curve offers a revealing snapshot of where the economy stands. Short-term bills yield around 3.69%, while the benchmark 10-year note sits at 4.05% and the 30-year bond pays 4.70%. The Federal Reserve has cut the federal funds rate to 3.64% from its 2025 peak of 4.33%, and the yield curve has returned to a normal upward slope after its prolonged inversion. For investors, this creates a genuine opportunity to lock in yields that exceed inflation — but only if you understand the differences between the four main types of Treasury securities and how to buy them. This guide breaks down everything you need to know: what T-Bills, T-Notes, T-Bonds, and TIPS are, how Treasury auctions work, where to buy them, and when they make sense in your portfolio.