Odd Lots The Greatest Ever Panel on the World's Most Important Market
91 snips
Jul 2, 2025 
Nellie Liang, a senior fellow at Brookings and former Treasury undersecretary, Ira Jersey, a chief interest rate strategist at Bloomberg, and Josh Younger, a Columbia lecturer, dive into the crucial U.S. Treasury market. They discuss concerns about bond demand amidst rising deficits and dissect the complexities of liquidity and volatility in financial markets. The trio draws parallels between historical strategies and current buyer motivations, exploring the impact of inflation and fiscal policies on market dynamics, while emphasizing the need for robust liquidity.
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Changing Treasury Buyer Base
- The US Treasury market will have buyers despite changes in the investor base.
- Price and volatility will fluctuate more due to increased presence of price-sensitive non-bank financial institutions.
Diverse Treasury Buyer Motivations
- Buyers of US Treasuries vary in their investment horizon and risk tolerance.
- Long-term liability hedgers provide stability, while hedge funds respond rapidly to price signals.
Liquidity and Yield Dynamics
- Treasury yields largely reflect long-run nominal GDP growth.
- Deep, liquid funding and derivatives markets enhance liquidity and result in tighter bid-ask spreads.