A Treasury ladder spreads maturity dates across several points on the curve instead of putting everything into one bond or one bill. Investors use it to balance cash-flow access with yield capture.
What a ladder solves
If all capital matures at once, you are exposed to a single reinvestment moment. A ladder reduces that timing risk because only part of the portfolio rolls over at each interval.
What a ladder does not solve
A ladder does not remove rate risk entirely. If yields jump after you buy longer maturities, mark-to-market prices still fall. It also does not guarantee the best yield if the curve changes direction.
Before you choose maturities
Check the dashboard first:
- Is the curve normal, flat, or inverted?
- Is the 5Y giving enough pickup over the 2Y?
- Is the 10Y rewarding you enough for the extra duration?
These are the comparisons that should come before any ladder design. If the dashboard shows a large move in the 2Y or a sharp change in the 10Y-2Y spread, reassess whether your ladder still matches your time horizon and reinvestment needs.