Kevin Walter’s work-from-home experiment lasted mere hours. On March 12, the Barclays trader was so alarmed by the turbulence flaring up in the US government bond market that he jumped in a car and made a dash from his home in Connecticut to his office in the normally crowded Times Square.
Trading conditions for US Treasuries had been poor for a while. But that Thursday — the day after Covid-19 was declared a pandemic — unnerving glitches escalated into mayhem. “It was a shock to see these distortions in the market,” says Mr Walter, co-head of global Treasury trading at the British bank.
It is hard to overstate the importance of the roughly $20tn market for US government debt, or the alarm that its mounting dysfunction in March caused. The Treasury market is the biggest, deepest and most essential bond market on the planet, a bedrock of the global financial system, and the benchmark off which almost every security in the world is priced.