Bloomberg Intelligence US Treasuries Slide in Worst Selloff Since 2019
Apr 11, 2025
Alison Williams, a senior analyst at Bloomberg Intelligence, dives into the surprising shifts in U.S. bank earnings amid market chaos. She reveals how JPMorgan Chase capitalized on trading volatility for record gains while Morgan Stanley also exceeded expectations. However, Wells Fargo fell short, struggling with soft loan demand. The discussion also touches on how foreign investment behaviors and economic uncertainties are reshaping the landscape of U.S. Treasuries and banking.
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Treasury Market Volatility
- Foreign investors are reducing their U.S. dollar risk, impacting treasury bonds.
- This market action, while significant, isn't unprecedented, mirroring trends seen in 2013 and 2022.
Foreign Treasury Holdings
- One-third of the treasury market is held by entities outside the U.S., including foreign central banks and investment funds.
- Even if these entities don't sell, reduced buying requires lower prices (higher yields) to attract new buyers, increasing market volatility.
Treasury Auction Results
- Recent treasury auctions saw poor performance in 3-year bonds but strong demand for 10- and 30-year bonds.
- However, this strong demand didn't lower yields as expected, signaling potential further yield increases.