US Treasuries as an Economic Indicator

U.S. Treasuries are debt obligations issued and backed by the U.S. government. What this means is that the chances of default are almost zero. As a credit crisis unfolds, investors take their money out of other assets, such as stocks, bonds, certificates of deposit (CDs) and money markets. This money goes into U.S. Treasuries, which are considered to be one of the safest investments. As the money continues to flow into this area, it forces the yield on short-term treasuries (also known as Treasury bills) down. This lower yield is a sign of high anxiety in the markets as a whole as investors search for safer places to put their money.