🧵 1. To prevent future market crises like the onset of COVID-19, a new analysis suggests the Fed should be ready to buy unlimited bonds when needed. #finance
🧵 1. To prevent future market crises like the onset of COVID-19, a new analysis suggests the Fed should be ready to buy unlimited bonds when needed. #finance
🧵 2. The $25 trillion US Treasury market needs resilience. During the pandemic, dealer balance sheets couldn't handle the surge in sales.
🧵 3. More Treasury securities are being liquidated in a crisis, straining dealer capacity limits. Official-sector purchase programs can strengthen market resilience.
🧵 4. Central clearing and changes to bank capital levels can reduce future bouts of Treasury market illiquidity. Temporary changes made in 2020 need to be extended.
🧵 5. Encouraging direct buying and selling without dealer intermediation can also improve Treasury market function. Technical changes needed.
🧵 Read more at: https://www.reuters.com/markets/rates-bonds/how-keep-next-dash-cash-crashing-bond-market-study-2023-08-25/