The $25 trillion U.S. Treasury market, the world’s largest and most liquid, faces structural strain as a planned expansion of central clearing requirements has been postponed to early 2024. While intended to improve market stability, new rules may drive out nonbank liquidity providers, undermining the very liquidity they aim to protect. Recent volatility and failures in Treasury pricing, despite Federal Reserve intervention, signal deeper market weaknesses. A centrally cleared model could modernize trading but may not guarantee resilience. External threats, like cyberattacks, also highlight growing systemic risks.

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