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If trading bonds is tough, think about the pain when rates rise

Less depth lately has meant greater volatility. So US Treasuries may be prone to more disruptions

New York

TRADING US Treasuries keeps getting tougher and tougher.

For decades, the US$12.5 trillion market for US government debt was renowned for its "depth": Wall Street's way of talking about a market's ability to handle large trades without big moves in prices.

But lately, that resiliency has practically vanished - and that's a big worry.

Less depth has meant greater volatility. So Treasuries - the world's haven asset during turmoil - may be prone to more disruptions, particularly as the US Federal Reserve prepares to raise interest rates.

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