Marketable vs. non-marketable debt

The split

Marketable securities are the ones sold at auction and traded afterwards: bills, notes, bonds, TIPS and floating rate notes. Anyone can buy them, and they change hands constantly in a market that runs into the trillions. Non-marketable securities are the opposite: issued directly to a named holder, never traded, and redeemable only with the Treasury.

Who holds the non-marketable part

Most of it sits with the government’s own trust funds, which hold special securities that cannot be sold to anyone. Savings bonds, sold directly to individuals, are the other main kind. Because the trust funds are internal, the non-marketable share is largely the intragovernmental portion of the debt.

Why the distinction matters

Marketable debt has to be refinanced in public markets, at whatever rate those markets demand, which is why it is the part that connects the debt to interest rates and to confidence. Non-marketable debt is a set of internal obligations, refinanced by rolling into new special securities. The two behave differently enough that the average interest rate is published for marketable debt on its own.