How the Treasury market got hooked on hedge fund leverage

The bond market isn’t just important - it’s extremely interesting right now

The factors that drive bonds reach deep into the economy and right now that connection is being tested

How the Treasury market got hooked on hedge fund leverage

Recent turbulence was partly the result of trading strategies using derivatives. But the same investors are increasingly important buyers of US government debt

The Treasury Market - Clark Center Forum

The market for US Treasurys has a strong claim to being the most important of all financial markets. To a greater or lesser extent, most other markets are – to some degree at least – priced in relation to it. It provides the benchmark, or risk-free rate, against which riskier assets are priced. And in recent weeks, it has been volatile. At the beginning of April, a 10-year U.S. Treasury yielded around 4.2%. In the immediate aftermath of the Libe…