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Historical U.S. Treasury Yield Charts

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It seems hard to believe now, but it was once possible to earn a 15.94% yield on a safe, two-year investment. People have become used to today’s low-rate environment, but the miniscule yield on government bonds is in fact a relatively new phenomenon.

The cause of the elevated yields of the late 1970s and early 80s was the high inflation of that era which led U.S. Federal Reserve Chairman Paul Volcker to begin raising short-term interest rates dramatically during the early 1980s. The result, for a brief time, was ultra-high yields on U.S. Treasuries. Keep in mind, however, that due to the high rate of inflation at the time, the real (or after-inflation) yield investors received was much lower than it appears.

Volcker ultimately succeeded in breaking the back of inflation, which ushered in what has become a 30-year bull market in government bonds. (Prices and yields move in opposite directions). Still, while yields fell substantially during the 1980s, they didn’t approach the low rates of today. The reason for the continued decline in yields was the U.S. Federal Reserve’s responses to a series of crises (or would-be crises) throughout the past decade-plus, beginning with Y2K and followed by the stock market crash of 2000-2002, the banking/financial crisis of 2007-2008, and the combination of the European debt crisis and the environment of slow economic growth and high unemployment the United States faces today.

The Fed doesn’t control long-term rates, of course, but its policy with regard to short-term rates sets the basis for yields on government bonds with longer maturities. The Fed has pledged to keep rates low until the employment picture improves or inflation begins to tick up.

Finally, note that even though yields have risen substantially thus far in 2013, the increase is relatively small within the context of these longer-term charts.

The yields for the two-, five-, and ten-year notes, along with their highs, lows, and long-term averages, are based on “constant maturity” method employed by the U.S. Treasury (which provides a steady flow of data for a particular maturity even as older issues mature and are replaced by newer bonds). The 30-year isn’t included since it wasn’t issued between February 2002 and February 2006. The raw data is available here.

2-Year Note: View the chart here.

  • Chart Range: 6/1/76-10/16/13
  • High: 5/13/81 15.94% / Low: 9/19/11 0.16%
  • Average: 5.93%

5-Year Note: View the chart here.

  • Chart Range: 1/2/62-10/16/13
  • High: 9/30/81 16.27% / Low: 7/25/12 0.56%
  • Average: 6.25%

10-Year Note: View the chart here.

  • Chart Range: 1/2/62-10/16/13
  • High: 9/30/81 15.84% / Low: 7/25/12 1.43%
  • Average: 6.57%

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