Bond yields could drop under an idea that would make Treasury trading more like the stock market

US Treasury Department.
Treasury markets have a liquidity problem that was fueled by regulatory changes after 2008.
All-to-all trading, similar to how equities operate, is a possible fix that regulators are studying.
It could also lead to astronomical growth in bond markets and lower yields, which would lift stocks.

Treasury markets have a liquidity problem fueled by regulatory changes after 2008, and one idea for fixing it could send trading volume higher — and bond yields lower.

Known as “all-to-all” trading, the idea would allow any market participant to interact directly with another, without intermediaries. That’s more like how the stock market works. But in the Treasury market, banks have traditionally acted as dealers for buyers and sellers.

Federal regulators are studying the idea. The Inter-Agency Working Group — which includes officials from the Federal Reserve, Treasury, SEC, and CFTC — said in November it’s looking at the pros and cons of all-to-all trading in the…

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This article was written by Filip De Mott and originally published on