Final answer:
The price you pay for a Series E U.S. savings bond can vary with changes in interest rates. If rates have risen, the bond may cost less, and if rates have fallen, it could cost more. U.S. Treasury bonds are seen as a secure investment, often holding value despite low-interest rates.
Step-by-step explanation:
Given the change in interest rates, whether you would expect to pay more or less than $10,000 for a Series E U.S. savings bond depends on how the bond is structured and current market conditions. Typically, U.S. Treasury bonds, including savings bonds, have their price influenced by interest rates. If interest rates have risen since the bond was issued, new bonds would likely offer a higher return, making older bonds with lower rates less expensive in order to compete. Conversely, if rates have fallen, existing bonds with higher interest rates become more valuable and may sell for more than their initial price.
United States federal Treasury Bonds are highly regarded around the world and are purchased by a variety of entities including individuals, banks, and global sovereign funds. Thanks to the country's long history of consistent payments, U.S. bonds are seen as a very safe investment, often retaining value and investor interest even when they offer low interest rates.
The Federal Reserve, the central bank of the U.S., has the ability to create money, which it can use to purchase bonds. This is typically done with a few keystrokes on a computer, crediting the seller's bank account with newly created funds.