Bond Yields

Bond yields mean the return investors earn from holding bonds. In simple terms, bond yields show how much interest investors can expect from a bond compared with its price. Bond yields are important because they affect borrowing costs, stock valuations, mortgage rates, and investor decisions. When bond yields rise, safer fixed-income investments may become more attractive, and stocks can face pressure. For example, if U.S. Treasury yields rise sharply, investors may worry that borrowing costs will stay high. Bond yields are not the same as bond prices. When bond prices rise, yields usually fall, and when bond prices fall, yields usually rise.