As our research points out, to reduce the likelihood of future intervention by central banks, any policy response should consider ways to enhance the market structure for U.S. Treasury securities, such as ensuring that policymakers have the data necessary to properly surveil the U.S. Treasury market, facilitate market functioning under stress, and inform future regulatory actions. Further, reforms that would foster continuous market-making and improved transparency should be considered. The market for U.S. Treasury securities is a vital part of our global fixed income markets and must be resilient during times of market stress.
For an in-depth analysis of the fixed income markets during the height of the pandemic-related market volatility and our recommendations for a path forward, check out our paper:
The dash for cash: Observations on the fixed income market ecosystem during COVID-19