Treasury yields are climbing again, and this time the move is tied as much to geopolitics as economics. A new energy shock, rising inflation expectations and fading hopes for Middle East de‑escalation are pushing the bond market to reprice risk across the board — from mortgages to corporate borrowing to consumer credit.

If you don’t follow financial markets closely, it can be difficult to grasp how central Treasury securities — the mechanisms through which the federal government borrows money — are to the country and the world. And with yields rising for reasons that stretch far beyond routine economic data, understanding how these bonds work is the first step in making sense of what is happening now.

On the foundational level, as the Federal Reserve Bank of St. Louis explains, there are three major types of bonds: bills, notes and bonds. Let’s call them all bonds.

Bonds have a price, an interest rate and a term. The government issues them, and investors buy the bonds for a set price. In return, investors receive set interest payments for the term of the bond.

Investors may not want to hold a bond for the entire term. They can sell them to other investors through secondary markets. Investors compare the bonds to newly issued ones by calculating the bond yield, while involves dividing the annual coupon (interest) payment by the........

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