Why Treasury Market Spasms That Shouldn't Happen Keep Happening
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 8 April 2021
⏱️ 51 minutes
🧾️ Download transcript
Summary
The U.S. Treasury market is the biggest, most liquid market in the world. Its smooth functioning is also crucial to the economy and the financial system. Yet it keeps experiencing bizarre, seemingly inexplicable bouts of volatility. We saw it in February. We saw it big time last March. And we saw it multiple times in recent years before then. On this episode, we speak with Yesha Yadav, a professor at Vanderbilt Law School, who argues that these episodes can be explained by the inadequate patchwork of regulations governing this market.
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| 0:54.3 | Hello and welcome to another episode of the Adlots podcast. I'm Tracy Allowe. |
| 0:59.6 | And I'm Joe, why isn't all? Joe, do you ever think about U.S. Treasuries? |
| 1:04.9 | Yeah, every day. That's like, on I run at the first thing, |
| 1:08.8 | get up in the morning, think about Treasuries. Absolutely. |
| 1:12.5 | Yeah. I mean, Treasuries are sort of the thing that the entire market is revolving around at |
| 1:18.4 | the moment. Like, there's so many things that are correlated with yields. But I guess let me frame |
| 1:23.6 | that question a bit differently. Do you ever think about what a Treasury actually is? |
| 1:26.9 | Yeah. I mean, I don't have as strong like intuitions about it, but I kind of feel that, |
| 1:34.6 | yeah, I do. But I could, you know, I'm always up for learning more. |
| 1:39.2 | Yeah. Well, that's what we're going to be doing in this episode. And I think it's an important |
| 1:44.8 | topic. I mean, it's obviously an important topic. But one of the reasons it's worth looking |
| 1:50.0 | into is because I think most people tend to think of a U.S. Treasury as, you know, it's a bond |
| 1:55.9 | issued by the U.S. government. It's unlikely to default. It acts as a sort of safe asset |
| 2:02.3 | in the financial system. There's one other aspect of U.S. Treasuries that doesn't get as much |
| 2:07.6 | attention. And that's the fact that it's supposed to be this huge and liquid market that's really |
| 2:15.2 | easy to trade. Yeah. I mean, it's a U.S. like, what is a Treasury and how I think about it? At some |
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