30-Year Treasury: Meaning, History, Examples

Key takeaways

• The 30-year Treasury is a U.S. government bond with a 30-year maturity that pays interest semiannually and returns face value at maturity.
• It historically served as a long-term benchmark, though the 10-year Treasury is now more commonly referenced.
• Price relative to face value depends on the bond’s coupon versus market yield: premium (coupon > yield), par (coupon = yield), or discount (coupon < yield).
• Other Treasury securities include T-bills, notes, and TIPS; savings bonds (Series EE) differ as non-marketable, accumulating instruments.

What is a 30-year Treasury?

A 30-year Treasury is a marketable U.S. government bond that matures 30 years after issuance. It pays fixed interest twice a year and repays the bond’s face (par) value at maturity. Because it is backed by the U.S. government, it is considered a very low-credit-risk investment, though it carries interest-rate and inflation risk over its long term.

Historically the long-term benchmark for U.S. government debt, the 30-year yield is still closely watched as an indicator of investor expectations for long-term rates and inflation. In practice, the 10-year Treasury is now more commonly used as the benchmark.

How it works

• Interest payments: Semiannual coupon payments based on the bond’s stated coupon rate.
• Maturity payment: Principal (face value) returned at the end of 30 years.
• Market pricing: Set at auction. After issuance, the bond trades in the secondary market where its price fluctuates with changes in market yields and interest-rate expectations.
• Auction mechanics: Investors may submit noncompetitive bids (up to $5 million) guaranteeing allocation at the announced yield, or competitive bids (up to 35% of an offering) specifying desired yields. Bonds are sold in $100 increments; the minimum purchase is $100.

Pricing: par, premium, discount

Bond price relative to face value depends on the relationship between the coupon rate and current market yield (yield to maturity, YTM):
* Coupon = YTM → sold at par.
* Coupon < YTM → sold at a discount (price < face value).
* Coupon > YTM → sold at a premium (price > face value).

Example: a 30-year bond with a 3% coupon will trade at a discount if market yields rise to 4%, and at a premium if yields fall to 2%.

Comparison with other Treasury securities

• T-bills: Short-term instruments with maturities under one year; sold at a discount and do not pay periodic interest.
• Treasury notes: Medium-term securities with maturities from 2 to 10 years; pay semiannual interest.
• TIPS (Treasury Inflation-Protected Securities): Principal adjusts with the Consumer Price Index (CPI); interest is paid on the inflation-adjusted principal, providing inflation protection.
• U.S. Savings Bonds (Series EE): Non-marketable, accumulate interest for up to 30 years and are redeemable after one year (with a penalty if redeemed within five years). For example, redeeming a Series EE after 24 months yields interest only for 21 months because three months’ interest is forfeited if sold before five years.

Risks and considerations

• Interest-rate risk: Long maturity makes 30-year Treasuries highly sensitive to changes in interest rates—prices fall when rates rise.
• Inflation risk: Fixed coupons can lose purchasing power if inflation rises; TIPS mitigate this risk.
• Reinforcement of market signals: Changes in the 30-year yield reflect investor demand for long-term safe assets and expectations about future growth and inflation.
• Liquidity and market role: While still widely traded, the 10-year Treasury has become the primary reference for many markets; the 30-year remains important for long-duration investors, pension funds, and mortgage markets.

Index tracking

The S&P U.S. Treasury Bond Current 30-Year Index tracks the most recently issued 30-year Treasury and is a market-value-weighted measure used to evaluate performance of this segment of the Treasury market.

Why it matters

The 30-year Treasury influences mortgage rates, long-term borrowing costs, and portfolio allocation for investors seeking duration. Movements in its yield provide insight into long-run expectations for economic growth, inflation, and monetary policy. Understanding its mechanics—coupon, yield, pricing, and auction rules—helps investors assess how and why its price and yield change over time.