Bond yield is the return an investor earns from holding a bond, typically expressed as an annual percentage. It can refer to the coupon yield (fixed interest rate on the bond), the current yield (annual coupon divided by the current market price), or the yield to maturity (total return if held until the bond matures). Bond yields move inversely to bond prices and are a critical indicator of interest rate expectations, inflation outlook, and economic conditions. Rising yields generally indicate tighter financial conditions.
Example
“The 10-year Treasury bond yield climbed to 4.8%, reflecting market expectations that the Federal Reserve would keep interest rates higher for longer.”