Treasuries Wilder Than Ever as Ultrafast Bond Traders Rise Up
- Big swings occurring almost twice as much as statistical norms
- HFT firms may create an illusion of liquidity, N.Y. Fed says
This article is for subscribers only.
In the year since Treasuries suddenly went haywire in the bond market’s version of the “flash crash,” unusual bursts of volatility have become more common than ever before.
The $12.9 trillion U.S. government bond market -- long considered the deepest and most liquid in the world -- is now plagued by more bouts of turbulence than at any time since at least the 1970s. By one measure, outsize swings are occurring almost twice as often as statisticians would normally expect, according to data compiled by TD Securities.