On November 21, the Congressional Research Service released a report reviewing possible disruptions in the U.S. Treasury securities market and outlining policy options. The nearly $30 trillion Treasury market is critical for global financial stability, but several events in 2019 and 2020 highlighted vulnerabilities in market liquidity and resilience. The report identified key concerns, including the rapid growth of the Treasury market relative to intermediaries’ capacity and shifts in institutional investor behavior.

The report presented several policy options for Congress to consider, including expanding market capacity, mandating central clearing, and reducing leverage from hedge funds. Additional recommendations included evaluating federal backstop options, utilizing the Treasury’s buyback program to support liquidity, and increasing data transparency for risk monitoring.