Quick Verdict
Treasury bonds are NOT HALAL. This is not a gray area. Treasury bonds are interest-bearing debt instruments — the quintessential example of riba. When you buy a Treasury bond, you lend money to the US government and receive periodic interest payments. This is the definition of what Islam prohibits.
Why Treasury Bonds Are Clearly Riba
A Treasury bond pays a coupon rate (say 4.5% annually) on the principal amount, regardless of whether the government makes a profit or loss. This is predetermined, guaranteed interest on a loan — riba al-nasi'a (interest on delayed repayment) in its purest form.
The fact that the borrower is a government rather than a bank doesn't change the nature of the transaction. The prohibition on riba applies to all forms of interest-based lending, not just consumer loans.
Treasury Inflation-Protected Securities (TIPS)
TIPS are also not halal. The inflation adjustment doesn't convert them into a halal instrument — they still pay interest (albeit adjusted for inflation) on a loan to the government.
I Bonds
I Bonds (Series I savings bonds) are also interest-bearing and not halal, despite their popularity as inflation hedges.
Halal Alternatives
For government-debt-like safety, Muslim investors should look at: sovereign sukuk (issued by Muslim-majority countries and increasingly by non-Muslim countries), gold, or stable halal equity dividend streams. The UK, Germany, and other Western governments have issued sukuk — these are halal alternatives to conventional government bonds.
Bottom Line
Treasury bonds, T-bills, T-notes, TIPS, I Bonds — all forms of US government debt are interest-bearing and impermissible for Muslim investors. Seek sukuk and other halal alternatives for fixed-income portfolio stability.