United States Treasury Security

A United States Treasury Security is a government debt instrument issued by the United States Department of the Treasury through the Bureau of the Public Debt to finance government spending beyond what is collected through taxation.

• AKA: Treasury, Treasurys, T-Security, U.S. Treasury.
• Context:
  • It can typically serve as a U.S. Government Financing Tool through debt issuance mechanisms managed by the Bureau of the Fiscal Service, which succeeded the Bureau of the Public Debt in 2012.
  • It can typically provide Full Faith and Credit Backing through the U.S. government guarantee that it will raise money by any legally available means to repay debt obligations.
  • It can typically offer Lower Risk Investment Options through government backing that reduces default probability compared to corporate securitys.
  • It can typically generate Interest Income through periodic payments or discount appreciation depending on the united states treasury security type.
  • It can typically provide Tax Advantage through state and local tax exemptions on interest earned while remaining subject to federal income tax.
  • It can typically be purchased through TreasuryDirect platform, financial institutions, or broker-dealers.
  • It can typically be sold in auctions conducted by the Federal Reserve Bank of New York.
  • It can typically serve as a Benchmark Rate for other interest rates throughout the economy.
  • It can typically be classified as Risk-Free Investment when held to maturity.
  • It can typically possess high market liquidity with active secondary market trading.
  • ...
  • It can often serve as a Safe Haven Asset during market volatility periods when investors seek capital preservation.
  • It can often function as a Benchmark Rate Setter for other fixed-income securitys in the financial market.
  • It can often provide Inflation Protection Options through specialized treasury security types like Treasury Inflation-Protected Securities.
  • It can often be held as a Cash Equivalent by institutions, corporations, and wealthy investors due to its liquidity and safety.
  • It can often be issued in various denominations, ranging from $1,000 to $5 million for certain non-competitive bids.
  • ...
  • It can range from being a Short-Term United States Treasury Security to being a Long-Term United States Treasury Security, depending on its maturity timeframe.
  • It can range from being a Marketable United States Treasury Security to being a Non-Marketable United States Treasury Security, depending on its transferability characteristic.
  • It can range from being a Zero-Coupon United States Treasury Security to being a Periodic Interest-Paying United States Treasury Security, depending on its interest payment structure.
  • It can range from being a Fixed-Rate United States Treasury Security to being a Variable-Rate United States Treasury Security, depending on its interest rate characteristic.
  • It can range from being a Standard Principal United States Treasury Security to being an Inflation-Adjusted Principal United States Treasury Security, depending on its principal adjustment mechanism.
  • ...
  • It can support U.S. Federal Budget through deficit financing mechanisms.
  • It can influence Monetary Policy Implementation through open market operations conducted by the Federal Reserve.
  • It can affect Global Financial Markets through its yield curve movements and benchmark status.
  • It can serve as High-Quality Liquid Assets for financial institutions meeting regulatory requirements.
  • ...
• Examples:
  • Marketable United States Treasury Security Types, such as:
    • U.S. Treasury Bills, such as:
      • Four-Week U.S. Treasury Bill for short-term government financing.
      • Eight-Week U.S. Treasury Bill for short-term government financing.
      • Thirteen-Week U.S. Treasury Bill for short-term government financing.
      • Twenty-Six-Week U.S. Treasury Bill for short-term government financing.
      • Fifty-Two-Week U.S. Treasury Bill for short-term government financing.
      • Cash Management Bill for temporary cash balance management.
    • U.S. Treasury Notes, such as:
      • Two-Year U.S. Treasury Note for medium-term government financing.
      • Three-Year U.S. Treasury Note for medium-term government financing.
      • Five-Year U.S. Treasury Note for medium-term government financing.
      • Seven-Year U.S. Treasury Note for medium-term government financing.
      • Ten-Year U.S. Treasury Note for medium-term government financing and benchmark rate setting.
    • U.S. Treasury Bonds, such as:
      • Twenty-Year U.S. Treasury Bond for long-term government financing.
      • Thirty-Year U.S. Treasury Bond for long-term government financing and pension fund matching.
    • Specialized United States Treasury Security Types, such as:
      • U.S. Treasury TIPS for inflation risk management through consumer price index adjustment.
      • Floating Rate Note for variable interest rate exposure.
      • Separate Trading of Registered Interest and Principal of Securities for zero-coupon treasury investment and specific future payment requirements.
  • Non-Marketable United States Treasury Security Types, such as:
    • U.S. Savings Bonds, such as:
      • Series EE Savings Bond for individual long-term saving.
      • Series I Savings Bond for inflation-protected individual saving.
    • State and Local Government Series for municipal bond sale proceed investment.
    • Government Account Series for federal government entity investment.
  • United States Treasury Security Purchase Methods, such as:
    • Competitive Bid Treasury Purchase for institutional investors and dealers.
    • Non-Competitive Bid Treasury Purchase for individual investors with limits up to ten million dollars.
    • TreasuryDirect Online Purchase for direct-from-government investment.
    • Financial Institution Intermediated Purchase for brokerage account holders.
  • ...
• Counter-Examples:
  • Corporate Bonds, which lack united states government backing and carry higher default risk.
  • Municipal Bonds, which are issued by state governments or local governments rather than the federal government.
  • Agency Securitys, which are issued by government-sponsored enterprises that lack the same full faith and credit guarantee.
  • Foreign Government Bonds, which are issued by non-U.S. governments and subject to different sovereign risk factors.
  • United States Treasury Department, which is the government institution that issues united states treasury securities rather than being a security itself.
• See: Government Bond, Bureau Of The Public Debt, Security (Finance), Debt, Federal Government Of The United States, U.S. Treasury Bill, U.S. Treasury Note, U.S. Treasury Bond, U.S. Treasury TIPS, U.S. Savings Bonds.

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References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/United_States_Treasury_security Retrieved:2014-3-14.
  • A United States Treasury security is a government debt issued by the United States Department of the Treasury through the Bureau of the Public Debt. Treasury securities are the debt financing instruments of the United States federal government, and they are often referred to simply as Treasuries. There are four types of marketable treasury securities: Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities (TIPS). There are several types of non-marketable treasury securities including State and Local Government Series (SLGS), Government Account Series debt issued to government-managed trust funds, and savings bonds. All of the marketable Treasury securities are very liquid and are heavily traded on the secondary market. The non-marketable securities (such as savings bonds) are issued to subscribers and cannot be transferred through market sales.

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