Brookings Institute Hosts Discussion of Structural Issues within U.S. Bond Markets (with Lofchie Comment and Delta Strategy Group Summary)
The Economic Studies Program at the Brookings Institute hosted an event to discuss structural issues within the bond markets and how those markets have changed since the financial crisis. Counselor Antonio Weiss of the U.S. Treasury Department ("Treasury") and Governor Jerome Powell of the Board of Governors of the Federal Reserve System ("FRB") both made keynote remarks that addressed a recent staff report by the Treasury on events in the Treasury markets on October 15, 2014.
Lofchie Comment: FRB representatives continue to assert with confidence that their actions have made the markets safer (an assumption that seems impossible to prove), notwithstanding the demonstrable problems caused by those actions (such as reductions in liquidity) and the increasingly concentrated number of clearing firms. Perhaps the FRB Governors are correct, but such confidence seems unjustified by the facts.
Click here to view the hearing summary by Delta Strategy Group.