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Brian Chappatta

Bond Volatility Is Eerily Quiet. But Is It Too Quiet?

The Treasury market’s MOVE index is near a record low with the Fed on pause. There’s angst that the calm can’t last.

Don’t let the serenity fool you.

Don’t let the serenity fool you.

Photographer: Chaloner Woods/Hulton Archive/Getty Images

Traders in the world’s biggest bond market likely wished for some peace and quiet after the final weeks of 2018. From early November to the start of January, benchmark 10-year Treasury yields tumbled 70 basis points as investors flocked to havens amid a vicious stock market rout.

Now, almost two months later, they’re left to wonder if the $15.6 trillion market has become too quiet. Bank of America Corp.’s MOVE Index, which dates back to 1988 and tracks price swings on U.S. Treasury options, came within spitting distance of a record low this week. The index value touched 44.5 on Wednesday, close to the all-time low of 44 in November 2017 and another near-record of 44.3 in October 2018.