Why Bond Volatility is So Important

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Why Is Bond Market Volatility Collapsing? Reconsidering Global Liquidity Trends

 

Global Liquidity has recently fallen back to around US$165 trillion largely because of a drop in the size of the collateral pool that backs loans. This fall is closely linked to disruptions in World bond markets. Even if yields remain high, falling bond volatility could provide a welcome boost to Global Liquidity by reducing the size of ‘haircuts’ and raising the collateral multiplier. The size of the Fed’s RRP may be key?

 

 

 

See our latest published research, Global View - Why Is Bond Market Volatility Collapsing? Reconsidering Global Liquidity Trends - 4th September 2023

 

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