How often does the u.s treasury department issue bonds and at what prices? Does it issue bonds throughout the year with the same annual yield regardless of current bond prices in the bond market, as long as the Fed is not changing the interest rate ?
How often does the u.s treasury department issue bonds and at what prices?
The US Department of the Treasury runs actions for these new securities:
They range from T-bills:
- Treasury bills are issued for terms of 4, 8, 13, 26, and 52 weeks. Another type of Treasury bill, the cash management bill, is issued in variable terms.
- 4-week, 8-week, 13-week, 26-week, and 52-week bills are auctioned on a regular schedule.
- Cash management bills aren't auctioned on a regular schedule.
Treasury notes, sometimes called T-Notes, earn a fixed rate of interest every six months until maturity. Notes are issued in terms of 2, 3, 5, 7, and 10 years.
They also issue Treasury Bonds:
Treasury bonds pay a fixed rate of interest every six months until they mature. They are issued in a term of 20 years or 30 years.
The list of upcoming auctions is at Treasury Direct:
These are auctions:
Overview of the Auction Process
Treasury sells marketable securities (bills, notes, bonds, FRNs, and TIPS) through regular public auctions, by which the rate, yield, or discount margin of these securities are determined.
The process begins several days before the scheduled auction when the Treasury announces the details of the upcoming issue, including the amount to be auctioned and the maturity date. When you participate in an auction, you have two bidding options – competitive and noncompetitive. TreasuryDirect allows noncompetitive bidding only. Noncompetitive bidding is limited to purchases of $5 million per auction. Bidding limits apply cumulatively to all methods (TreasuryDirect, banks, and brokers) that are used for bidding in a single auction.
- With a competitive bid, you specify the rate, yield, or discount margin you will accept.
- With a noncompetitive bid, you agree to accept the high rate, yield, or discount margin set at auction.
At the close of an auction, Treasury accepts all noncompetitive bids that comply with the auction rules, and then accepts competitive bids in ascending order in terms of their rates, yields, or discount margins (lowest to highest) until the quantity of accepted bids reaches the offering amount. All bidders, noncompetitive and competitive, will receive the same rate, yield, or spread as the highest accepted bid.
Unless you are going to invest a ton of money, you just get them at the market rate set at the auction with a noncompetitive bid.