Comments in the Fed’s stability report
- Treasury market has functioned smoothly since last report in May
- Market liquidity remained low in several key areas and that could amplify volatiltiy and may ultimately impair market functioning
- Economic outlook has weakened, uncertainty remains elevated
US regulators haven’t done enough to prevent air pockets in the bond market. The explosion in short-dated options trading is also something that’s obviously going to end in disaster at some point as well.