What is the significance of an "on-the-run" Treasury security?

An "on-the-run" Treasury security is significant because it represents the most recently issued U.S. Treasury security of a particular maturity, making it a critical benchmark in the fixed-income markets. As the newest issue, it typically has the highest liquidity among similar maturities, and investors often look to it for pricing and yield comparisons. These securities are frequently used as the standard in measuring and comparing other bond yields, as they are seen as the most current reflection of investors' expectations regarding interest rates and overall economic conditions. This status is why "on-the-run" Treasuries are viewed as benchmarks for other securities, while older Treasury issues—termed "off-the-run"—may trade at different yields due to variations in demand and liquidity.