treasury bill

(noun)

A United States Treasury security is a government debt issued by the United States Department of the Treasury through the Bureau of the Public Debt. Treasury securities are the debt financing instruments of the United States federal government. They are often referred to simply as treasuries. There are four types of marketable treasury securities: Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities (TIPS), in which Treasury bills have the shortest maturity of one year or less.

Related Terms

(noun)

Treasury bills (or T-Bills) mature in one year or less. They do not pay interest prior to maturity; instead they are sold at a discount of the par value to create a positive yield to maturity.

Related Terms

Examples of treasury bill in the following topics:

  • The Common Financial Instruments

  • The Nature of Bonds

    • Treasury bonds, notes, and bills, which are collectively referred to simply as "Treasuries. " Two features of a bond - credit quality and duration - are the principal determinants of a bond's interest rate.
    • Bond maturities range from a 90-day Treasury bill to a 30-year government bond.

  • Answers to Chapter 2 Questions

    • Treasury bills (T-bills), commercial paper, banker's acceptances, negotiable bank certificates of deposit (CDs), repurchase agreements, Federal Funds, and Eurodollars.
    • Capital market instruments are Treasury notes (T-notes), Treasury bonds (T-bonds), general-obligation bonds, revenue bonds, and mortgages.

  • Financial Instruments

    • U.S.Treasury bills or T-bills are loans to the U.S. government.Maturities range from 15 days to one year.T-bills do not have an interest rate stamped on them, and they start at $10,000.If an investor buys a T-bill for $19,000, and the T-bill has a face value of $20,000 with a maturity of six months.Then six months later, the government will pay $20,000.The $1,000 reflects the interest.
    • Repurchase Agreements (repos) are short-term loans.For example, a bank sells T-bills to a customer and promises to buy it back the next day for a higher price.Greater price reflects interest.Banks used repos to circumvent the law, so banks could pay businesses interest on their checking accounts.Before the 1980s, U.S. banks could not pay interest on checking accounts.For example, IBM has excess funds in their checking account.Bank sells IBM T-bills and uses IBM's funds.Next day, the bank returns IBM's funds with interest and takes the T-bills back.Consequently, the bank paid interest on a checking account, although the U.S. law prohibited banks to pay interest on checking accounts.
    • U.S.Treasury securities are loans to the U.S. government.The U.S. government issues
    • Treasury Notes or T-notes from one to 10 years, while Treasury Bonds or T-bonds have maturities greater than 10 years.These Treasury securities have a stated interest rate, and government usually pays interest every six months.

  • Does U.S. Treasury Affect the Monetary Base?

    • Treasury Department.
    • Treasury finances a budget deficit by selling T-bills.
    • You buy a $20,000 T-bill.
    • Treasury.
    • For example, the Fed directly buys $100,000 in T-bills from the U.S. government.

  • The Budgeting Process

    • Treasury Department.
    • Much of the costs for the wars in Iraq and Afghanistan have not been funded through regular appropriations bills, but through emergency supplemental appropriations bills.
    • Some budget experts argue that emergency supplemental appropriations bills do not receive the same level of legislative care as regular appropriations bills.
    • The United States public debt is the money borrowed by the federal government of the United States through the issuing of securities by the Treasury and other federal government agencies.
    • Debt held by government accounts represents the cumulative surpluses, including interest earnings, of these accounts that have been invested in Treasury securities.

  • The Role of the Federal Budget

    • Treasury Department.
    • A vetoed bill is sent back to Congress, which can pass it into law with a two-thirds majority in each chamber.
    • Congress may also combine all or some appropriations bills into an omnibus reconciliation bill.
    • In addition, the president may request and the Congress may pass supplemental appropriations bills or emergency supplemental appropriations bills.
    • If it cannot pass a Federal Budget, it must pass appropriation bills as a "stop gap. "

  • Hamilton's Achievements

    • For instance, as the first Secretary of the Treasury, Hamilton established, despite opposition from Jefferson and Madison, the first National Bank.
    • Hamilton's economic policies as the Secretary of the Treasury influenced the development of the United States federal government from 1789-1800.
    • A depiction of Hamilton on the $10 bill in contemporary federal currency

  • Hamilton's Economic Policy

    • Alexander Hamilton, the first Secretary of the Treasury, strongly influenced the financial policies of the United States during the Federalist Era.
    • Secretary of the Treasury in 1789, a position he held until January 1795.
    • Washington did indeed request Hamilton's advice and assistance on matters outside the purview of the Treasury Department.
    • After reading Hamilton's defense of the National Bank Act, Washington signed the bill into law.
    • Secretary of the Treasury, Alexander Hamilton , shown here in a 1792 portrait by John Trumbull, released the “Report on Public Credit” in January 1790.

  • The Government Debt

    • Grant's administration pursued a series of policies to strengthen public credit, reform the Treasury, and reduce the debt.
    • One effect of the bill was creating a shortage of much needed cash for farmers in the western states and territories.
    • Treasury.
    • These changes soon led the Treasury to have a monthly surplus.
    • Boutwell served as secretary of the Treasury under Ulysses S.