US Treasury Yield Curve
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Rolling Correlation
How each bond ETF's daily returns have actually moved relative to other assets — computed from real price history, not asserted. Green = moves together, red = moves opposite, gray = little relationship either way.
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Why These Relationships Aren\u2019t Fixed
Correlations between bonds and other assets shift depending on what's actually driving the market, not some permanent rule:
Gold and bonds often move together when falling real yields are the story — both benefit as a "safe" store of value. But they can decouple hard during inflation-driven periods (2022 was the textbook case): inflation crushed bond prices while gold held up as an inflation hedge instead.
Stocks and bonds usually move opposite each other in a normal risk-off flight — money leaves stocks, flows into Treasuries, bond prices rise as stocks fall. But when the Fed is aggressively hiking rates, that relationship can flip: both stocks AND bonds fall together, since higher rates hurt both at the same time (also 2022).
That's the whole point of checking the actual numbers above instead of assuming a textbook relationship always holds — the "gold moves with bonds" instinct is often right, but not always, and the difference matters.
Gold and bonds often move together when falling real yields are the story — both benefit as a "safe" store of value. But they can decouple hard during inflation-driven periods (2022 was the textbook case): inflation crushed bond prices while gold held up as an inflation hedge instead.
Stocks and bonds usually move opposite each other in a normal risk-off flight — money leaves stocks, flows into Treasuries, bond prices rise as stocks fall. But when the Fed is aggressively hiking rates, that relationship can flip: both stocks AND bonds fall together, since higher rates hurt both at the same time (also 2022).
That's the whole point of checking the actual numbers above instead of assuming a textbook relationship always holds — the "gold moves with bonds" instinct is often right, but not always, and the difference matters.
| Country | 10Y-Equivalent Yield | As Of |
|---|---|---|
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The Basics
Face Value
The amount the bond pays back at maturity — usually $1,000 per bond. Also called "par value."
Coupon Rate
The fixed interest rate the bond pays, set when it's issued. A 4% coupon on a $1,000 bond pays $40/year.
Yield
The actual return you get based on what you paid for the bond today — different from the coupon rate whenever price ≠ face value.
Maturity
How long until the bond pays back its face value. A "10-year" bond matures in 10 years from issue.
Duration
A measure of how sensitive a bond's price is to interest rate changes. Longer maturity = higher duration = bigger price swings.
Basis Point (bp)
1/100th of a percent. "Yields rose 25bp" means yields rose 0.25%. Bond people use this instead of decimals.
Why Do Bond Prices Fall When Yields Rise? Must Understand
This is the single most confusing thing about bonds for most beginners — bond prices and yields move in opposite directions.
Say you own a bond paying a fixed $40/year (a 4% coupon on $1,000 face value). If new bonds start being issued paying 5%, nobody wants your old 4% bond at full price anymore — why would they, when they can get a better rate elsewhere? So the price of your bond has to drop until its effective yield (what a new buyer would actually earn) matches the going rate.
The coupon payment itself never changes. The price moves so the yield catches up to the market. That's why "rates rising" is bad news for bonds you already own, and why bond ETF prices (like TLT) fall when the Fed signals higher rates ahead.
Say you own a bond paying a fixed $40/year (a 4% coupon on $1,000 face value). If new bonds start being issued paying 5%, nobody wants your old 4% bond at full price anymore — why would they, when they can get a better rate elsewhere? So the price of your bond has to drop until its effective yield (what a new buyer would actually earn) matches the going rate.
The coupon payment itself never changes. The price moves so the yield catches up to the market. That's why "rates rising" is bad news for bonds you already own, and why bond ETF prices (like TLT) fall when the Fed signals higher rates ahead.
Reading the Yield Curve — Normal vs. Inverted
The yield curve chart above plots yields across every maturity, from 1 month to 30 years. Its shape tells you what the bond market thinks is coming, more directly than almost anything else you can look at.
Normal (Upward-Sloping)
Longer maturities pay more than shorter ones. The default, healthy shape — investors demand more yield for locking up money longer.
Flat
Short and long yields converge. Often shows up during a transition — the market is uncertain which direction is next.
Inverted
Short-term yields exceed long-term ones. Historically one of the more reliable recession warning signs — it means the market expects rates (and growth) to fall.
Treasuries vs. Corporate Bonds — Two Different Risks
Every bond carries some mix of two separate risks, and it's worth knowing which one you're actually taking:
Interest rate risk — the price-moves-opposite-yield effect explained above. This applies to every bond, including U.S. Treasuries, which are considered essentially free of default risk but are NOT free of price risk if rates move.
Credit risk — the chance the borrower doesn't pay you back. Treasuries (backed by the U.S. government) carry effectively none. Investment-grade corporate bonds (what LQD on this page tracks) carry some. High-yield "junk" bonds (what HYG tracks) carry meaningfully more — that's why they pay a higher coupon in the first place: you're being compensated for the extra risk the company might default.
Interest rate risk — the price-moves-opposite-yield effect explained above. This applies to every bond, including U.S. Treasuries, which are considered essentially free of default risk but are NOT free of price risk if rates move.
Credit risk — the chance the borrower doesn't pay you back. Treasuries (backed by the U.S. government) carry effectively none. Investment-grade corporate bonds (what LQD on this page tracks) carry some. High-yield "junk" bonds (what HYG tracks) carry meaningfully more — that's why they pay a higher coupon in the first place: you're being compensated for the extra risk the company might default.
What the ETFs on This Page Actually Hold
TLT and IEF hold long- and medium-term U.S. Treasuries — pure interest rate risk, no credit risk, and the most volatile of the group price-wise since they carry the most duration.
SHY holds short-term Treasuries (1-3yr) — much less price-sensitive to rate changes, closer to a cash substitute.
AGG is a broad mix of investment-grade U.S. bonds — Treasuries, agency, and corporate debt blended together, a common "total bond market" holding.
LQD and HYG hold corporate bonds — LQD investment-grade, HYG high-yield. Both add credit risk on top of interest rate risk, which is why they tend to move more in line with stocks during market stress than pure Treasury funds do.
SHY holds short-term Treasuries (1-3yr) — much less price-sensitive to rate changes, closer to a cash substitute.
AGG is a broad mix of investment-grade U.S. bonds — Treasuries, agency, and corporate debt blended together, a common "total bond market" holding.
LQD and HYG hold corporate bonds — LQD investment-grade, HYG high-yield. Both add credit risk on top of interest rate risk, which is why they tend to move more in line with stocks during market stress than pure Treasury funds do.