Politicians like raising money by selling bonds, as opposed to raising taxes, because voters hate taxes. Of course, when the government issues these Treasury bonds, it promises to repay the bond buyers over time. The more bonds the government issues, the greater its debt. The interest payments on that debt are an enormous burden, currently totaling more than $450 billion a year.
There are many kinds of Treasury bonds — from EE Bonds to I Bonds to TIPS — and each has unique characteristics. All of them, though, are backed by the “full faith and credit” of the federal government. Despite its huge debt, the United States of America is not going bankrupt any time soon, and for that reason, Treasury bonds have traditionally been referred to as “risk-free. That does not mean that the prices of Treasury bonds don’t fluctuate.
When bond experts speak of treasury bonds as having no risk, or almost no risk, what they mean is that the bonds have no credit risk. But Treasury bonds are very much subject to the other kinds of risk that beset other bonds: interest rates, inflation, and reinvestment.