JPMorgan Analysts Urge Large-Scale U.S. Treasury Buybacks
- Issuing new debt to retire old might mitigate illiquidity
- Treasury market depth has plunged amid the virus scare
This article is for subscribers only.
JPMorgan Chase & Co. strategists called for the U.S. Treasury to replace older government bonds with current benchmarks to address liquidity strains in the world’s biggest pool of risk-free securities.
Treasury market liquidity has dried up at times amid the tumult caused by fears over the economic hit of the coronavirus and the shock emergence of an oil-price war. Trading-platform order books have thinned out to a degree last seen during the 2008 financial crisis. The one-week average of Treasury-market depth has dropped to just $42 million in the 10-year sector, down 75% over the past month, according to JPMorgan.