One-Year Constant Maturity Treasury - 1-Year CMT

DEFINITION of 'One-Year Constant Maturity Treasury - 1-Year CMT'

The interpolated one-year yield of the most recently auctioned four-, 13- and 26-week U.S. Treasury bills, plus the most recently auctioned 2-, 3-, 5- and 10-year U.S. Treasury notes as well as the most recently auctioned U.S. Treasury 30-year bond, plus the off-the-runs in the 20-year maturity range.

BREAKING DOWN 'One-Year Constant Maturity Treasury - 1-Year CMT'

The U.S. Treasury publishes the one-year CMT value on a daily basis. Official weekly, monthly and annual one-year CMT values are published respectively. The monthly one-year CMT value forms a popular mortgage index to which many fixed period or hybrid adjustable-rate mortgages (ARMs) are tied.

Some mortgages such as payment option ARMs offer the borrower a choice of indexes. This choice should be made with some analysis. Different indexes have relative values which historically are quite constant within a certain range. For example, the one-year CMT index is typically lower than the one-month LIBOR index by about 0.1% to 0.5%. When considering which index is most economical, don't forget about the margin. The lower an index relative to another index, the higher the margin is likely to be.

RELATED TERMS
  1. Constant Maturity

    An adjustment for equivalent maturity, used by the Federal Reserve ...
  2. Monthly Treasury Average Index ...

    The 12-month moving average of the one-year constant maturity ...
  3. Off-The-Run Treasuries

    All Treasury bonds and notes issued before the most recently ...
  4. Auction Rate

    The interest rate that will be paid on a specific security as ...
  5. 30-Year Treasury

    A U.S. Treasury debt obligation that has a maturity of 30 years. ...
  6. Treasury Yield

    The return on investment, expressed as a percentage, on the debt ...
Related Articles
  1. Active Trading

    Buy Treasuries Directly From The Fed

    If you want government securities, go straight to the source. We'll show you how.
  2. Bonds & Fixed Income

    Introduction to Treasury Securities

    Purchasing bonds that are backed by the full faith and credit of the U.S. government can provide steady guaranteed income and peace of mind. Knowing the characteristics of each type of treasury ...
  3. Home & Auto

    Should You Buy A House At Auction?

    The traditional real estate market isn't the only place to conduct your home search. Auctions also bring many buying opportunities.
  4. Term

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  5. Options & Futures

    20 Investments: Treasuries

    What Is It? Also known as "government securities", treasuries are a debt obligation of a national government. Because they are backed by the credit and taxing power of a country, they are regarded ...
  6. Professionals

    Types Of Government Securities

    Series EE Bonds: The series EE bonds are commonly known as savings bonds. They are purchased directly from the US government at a discount from their face value, typically 50%. The Series EE ...
  7. Bonds & Fixed Income

    The History Of The T-Bill Auction

    Learn how the U.S. found the perfect solution to its debt problems and ended up creating one of the largest markets in the world.
  8. Bonds & Fixed Income

    What's a 10-Year Treasury Note?

    A 10-year Treasury note is an intermediate debt obligation issued by the United States government, and with a ten-year maturity date.
  9. Professionals

    Government Debt

    FINRA Series 7 Online Study Guide, Section 4
  10. Investing

    What's a T Bond?

    Treasury bonds, or T-bonds, are marketable securities issued by the US government, and are available in increments of $100. Bonds have a maturity range of ten to 30 years, with 30 being the most ...
RELATED FAQS
  1. What are the maturity terms for Treasury bonds?

    Learn how treasury bonds pay interest, when they reach maturity and the differences between terms for treasury bonds and ... Read Answer >>
  2. What is meant by off-the-run treasuries?

    Understand what is meant by off-the-run Treasuries, along with the key differences in yield that commonly occur between on- ... Read Answer >>
  3. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
  4. Why are treasury bond yields important to investors of other securities?

    Learn about the wide-ranging impact of U.S. Treasury Bond yields on all other interest-bearing instruments in the economy ... Read Answer >>
  5. Which economic factors impact treasury yields?

    Discover the economic factors that impact Treasury yields. Treasury yields are the benchmark yield for the rest of the world, ... Read Answer >>
  6. What are the differences between a treasury bond and a treasury note and a treasury ...

    Understand what types of securities the government issues, and learn the difference between Treasury notes, Treasury bonds ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center