Bonds and yields – additional information
The bond yield indicates the level of return that the investor can expect from a given type of bond. The government of Germany, for instance, offered the investors 0.40 percent yield on ten-year government bonds for borrowing their money in September 2017. This rate was very low compared to the yield on the ten-year Greek government bonds which was equal to 5.53 percent in the same month. It can be explained by the fact that Germany is perceived as one of the most stable countries worldwide while the economy of Greece suffers significant problems the investors need higher yields to be tempted to entrust their money to the Greek government.
In the United States, government needs are also financed by selling various debt instruments such as Treasury bills, notes, bonds and savings bonds to investors. The largest holders of U.S. debt were Federal Reserve and Government accounts in the United States as of December 2016. The U.S. government owed them 40.07 percent of its total debt. The major foreign holders of the United States treasury securities as of February 2017 were Japan, China mainland and Ireland, with 1111.3, 1102.2, 295.8 billion U.S. dollars of treasury debt held respectively.