why are interest rates on government bonds usually lower than other bonds 
bonds issued by the federal government are considered to be essentially riskless in the u s the federal government has never defaulted on its debt and the government could theoretically create more money or raise taxes in order to pay for the interest on existing debts to avoid default therefore treasuries carry what is known as the risk free rate of return corporate and other bonds must carry higher yields to compensate investors for the additional credit risk that are inherent to them 