What Is Treasury?
A debt security issued by the US government to fund its operations.
The Full Definition
A Treasury is a debt instrument issued by the US federal government — Treasury bills (under a year), notes (2 to 10 years), and bonds (20 to 30 years) — widely considered among the safest investments in the world because they're backed by the full faith and credit of the US government. Treasuries serve as the benchmark "risk-free rate" against which other investments are measured, and their yields ripple through mortgage rates, corporate bond pricing, and stock valuations across the entire economy.
Real-World Example
A 10-year Treasury note yielding 4.5% means an investor lending the government money for 10 years earns 4.5% annually — a baseline return investors compare every other investment against when deciding if the extra risk is worth it.