MNI BRIEF: Fed's Williams Urges More Resilient Treasury Market

New York Fed President John Williams Wednesday urged regulators and members of the private sector to come together to build a more resilient Treasury market.

In keynote remarks at a Treasury market conference among U.S. regulators, Williams cited the the so-called flash rally of October 2014, repo market distress in September 2019, and the market dislocations from the pandemic in March of 2020 in exposing weaknesses in the Treasury market.

"Over time, weaknesses can erode confidence. So now, the challenge before us is this: How do we strengthen the most important market in the world in a way that helps us avoid having to take dramatic steps to cure impairments during the middle of a future crisis?" he said. Last week, the Inter-Agency Working Group for Treasury Market Surveillance released a report providing an update on areas regulators are exploring, but did not provide policy recommendations.