What Is the One-Year Constant Maturity Treasury (CMT)?

What Is the One-Year Constant Maturity Treasury (CMT)?

3 Min.

The one-year constant maturity Treasury (CMT) is the yield of the recently auctioned Treasury securities for one year. Since no existing debt security matures in precisely one year, the one-year CMT is linked to an interpolated yield curve (I-curve) that provides a yield for a one-year security. The monthly one-year CMT value is a popular mortgage index to which many adjustable-rate mortgages (ARMs) are tied to.


The one-year constant maturity Treasury is derived from the latest auctioned U.S. Treasury bills (T-bills) with maturities of 4, 13, and 26 weeks. Additionally, it includes the most recent auctioned U.S. Treasury notes (T-notes) with maturities of 2, 3, 5, and 10 years, as well as the latest auctioned U.S. Treasury 30-year bond (T-bond). The calculation also considers off-the-run Treasuries within the 20-year maturity range.

The Dynamics of One-Year Constant Maturity Treasury (CMT) and Its Interpolated Yield Curve

The one-year constant maturity Treasury emerges from the adjustment of average yields of Treasury securities to a one-year equivalent, creating a vital index in the interest rate term structure. Published daily by the U.S. Treasury, the one-year CMT, including weekly, monthly, and annual values, serves as a benchmark for pricing debt securities issued by various entities. Tied to the yield curve, this index reflects the yields of short-, medium-, and long-term bonds, encompassing 11 maturities from 3 months to 30 years.

These maturities on the curve translate to the CMT rates, influencing a vital aspect of pricing bonds. The one-year CMT is intricately connected to an interpolated yield curve. Derived from daily yield curves, the U.S. Treasury employs an interpolation method based on closing market bid yields from actively traded Treasury securities in the over-the-counter (OTC) market. Constant maturity, in this context, ensures yield determination for specific maturities, even if no exact outstanding security matches that fixed maturity, providing a valuable tool for investment professionals.

The Role of CMTs in Shaping Mortgage Interest Rates

The monthly one-year CMT value serves as a widely adopted mortgage index, influencing the terms of fixed-period or hybrid adjustable-rate mortgages. Lenders utilize this fluctuating index to recalibrate interest rates, incorporating a fixed margin to determine the borrower's overall interest rate. As economic conditions shift, adjustments to this index prompt corresponding changes in associated loan interest rates.

In mortgage choices, borrowers may select from various indexes for interest rate calculation, including flexible choices like payment option ARMs. However, a prudent decision-making process, ideally guided by an investment analyst, is crucial. Different indexes maintain historically consistent relative values within specific ranges, requiring careful consideration.

For instance, the one-year CMT index, historically set lower than the one-month London Interbank Offered Rate (LIBOR) index (phasing out for rate setting), illustrates the importance of evaluating not only the index itself but also the margin or spread relative to a benchmark rate or index. This comparative analysis ensures an informed choice, as a lower index in relation to another implies a potentially higher margin.


The one-year constant maturity Treasury is a crucial metric representing the yield of recently auctioned Treasury securities for a one-year period. Utilizing an interpolated yield curve due to the absence of exact one-year maturities, the CMT serves as a significant mortgage index. Lenders adjust interest rates based on this dynamic index, incorporating a fixed margin. This interplay between economic conditions and the one-year CMT underscores its pivotal role in shaping adjustable-rate mortgages and guiding financial decision-making.

One-Year Constant Maturity Treasury (CMT)
Interpolated Yield Curve (I-Curve)
Adjustable-Rate Mortgages (ARMs)
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