U.S. Treasury Market Is Most Treacherous Since Pandemic’s Onset
- Bond market liquidity, volatility gauges signal distress
- Fed’s credibility as inflation-fighter is dented, analyst says
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The U.S. Treasury market has become a minefield over the past month.
As bond traders around the world try to force central banks to respond to elevated inflation rates, unusually large price swings have taken their toll. Signs have emerged of a vicious cycle in which reluctance to participate in the market impairs liquidity, making large price swings even more likely.