Why is the yield on 30-year Treasury bonds important? a. It indicates how much the Treasury has borrowed b. It indicates whether the US government has a balanced budget c. It represents the base-level cost of capital in the US d. It reflects Federal Reserve fiscal policy e. It is the fear index for the US markets

Question

Emelia Burgess

Business

17 August, 10:43

Why is the yield on 30-year Treasury bonds important? a. It indicates how much the Treasury has borrowed b. It indicates whether the US government has a balanced budget c. It represents the base-level cost of capital in the US d. It reflects Federal Reserve fiscal policy e. It is the fear index for the US markets

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Heather Hayden · Answer 1

c. It represents the base-level cost of capital in the US

Explanation:

Cost of capital is the minimum return that is needed to carry out capital projects such as building homes, road construction. It is the return that will make government projects viable.

So the United States government depend on the Treasury bonds 30 year yield to fund spending on various capital projects.