Updated
Updated · Bloomberg · Jun 4
Treasury Volatility Surges as 30-Year Yields Near 19-Year High on Futures Selling
Updated
Updated · Bloomberg · Jun 4

Treasury Volatility Surges as 30-Year Yields Near 19-Year High on Futures Selling

1 articles · Updated · Bloomberg · Jun 4

Summary

  • Large waves of Treasury futures selling hit the market during last month’s bond selloff, adding fresh volatility as long-dated yields climbed toward a 19-year high.
  • Mortgage-backed securities were being pummeled at the same time, pointing to growing mortgage hedging activity as a key force amplifying moves in Treasuries.
  • Vishal Khanduja flagged the pattern as unusual because the futures sales arrived just as stress in the mortgage market intensified, linking two normally connected but distinct pockets of fixed income.
  • The episode underscores how hedging flows—not just shifts in economic outlook or Fed expectations—can drive abrupt swings in the $29 trillion Treasury market.

Insights

Is mortgage hedging the real cause of market turmoil, or a symptom of America's record debt?
As lenders hedge home loans, is the entire US bond market being pushed towards a crisis?