Future-Proofing the U.S. Treasury Market

The pandemic threw the spotlight back on perceived gaps in the structure of the U.S. Treasury market. Some say the market’s infrastructure, and the Fed’s role in it, needs to change — as perhaps do banking regulations — to foster resiliency.

Recent stresses in U.S. Treasury trading have been incongruous with a market that holds itself out as the deepest and most liquid in the world. For those trading in March 2020, it was surprising how the pandemic-induced panic threatened the integrity of even safe-haven government securities and how challenging it was to sell them.