A general query regarding the 10 year treasury/bond yield - I'd appreciate some help please.
Please correct me if I'm wrong - I'm trying to join some dots, as I could only find sketchy details on the internet.
All I know is the 10 year bond yield curve is the price of 10 year treasuries/bonds on the secondary market (second hand market) at given points in time.
I'm assuming the 10 year bonds were originally issued some time ago - maybe years ago - at a set/fixed coupon rate. Let's say the coupon rate was 1.5%.
Some of these bonds were presumably then traded on the secondary market - and are subject to buying and selling and ongoing risk assessment by investors - the result of which is a varying yield (despite the fact the bonds were originally issued/auctioned at a fixed coupon rate - and if held to maturity - i.e., not sold into the secondary market - would have delivered the fixed rate throughout the tenure).
Am I right so far?
As the bonds (on the secondary market) near maturity, does the the yield curve change to reflect that?
If the US government issued a new batch of 10 year treasury bonds - would they need to be issued at a coupon rate close to the 10 year bond yield rate, to attract investors? What is the significance of the yield curve?