On-the-Run Treasury

An on-the-run Treasury is a Treasury security that is the most recently issued security with a given maturity. On-the-run Treasuries are typically the most liquid and have the lowest yields.

The term "on-the-run" refers to the fact that these securities are the most recent issues and are therefore the most actively traded. This liquidity makes them attractive to investors who are looking for a safe investment with a low yield.

On-the-run Treasuries are issued by the U.S. Treasury Department in auctions. The auctions are held on a regular basis, and the securities that are sold are the most recently issued securities with a given maturity.

The yield on an on-the-run Treasury is determined by the auction results. The higher the demand for the securities, the lower the yield will be. This is because the Treasury will set the price of the securities so that they are sold at par value.

The yield on an on-the-run Treasury is also affected by the current level of interest rates. When interest rates are low, the yield on on-the-run Treasuries will be low. This is because investors are willing to accept a lower yield in exchange for the safety of a Treasury security.

On-the-run Treasuries are an important part of the U.S. financial system. They are used by investors as a safe investment and by the U.S. government to finance its operations.