Treasury yield is the effective annual interest rate that the U.S. government pays on one of its debt obligations, expressed as a percentage. In other words, it is the annual return investors can expect from holding a U.S. government security with a given maturity. Treasury yields are inversely related to Treasury prices, and yields are often used to price and trade fixed-income securities including Treasuries. Treasury securities with different maturities have different yields; longer-term Treasury securities usually have higher yields than shorter-term ones. Treasury yields reflect investors assessments of the economys prospects; higher yields on long-term instruments indicate a more optimistic outlook and higher inflation expectations. Treasury yields rise with inflation in order to make up for the loss in purchasing power. Strong economic growth also leads to higher Treasury yields. When yields rise, this signals a drop in the demand for Treasuries because investors are bullish about the economy and seek higher returns elsewhere.