Bringing you live news and features since 2006 


US fixed income market structure struggling to maintain balance, says TABB Group


New research from Tabb Group “US Fixed Income Market: Industry Trends & Drivers 2014,” examines trends that have been developing throughout the US fixed income ecosystem, struggling to maintain its balance as the principal-based risk model that has been the norm is slowly deteriorating under the sheer size of the market it has been supporting. 

“The fixed income markets are expanding,” say report co-authors Anthony Perrotta, a TABB principal and director of fixed income research, and Colby Jenkins, research analyst. The US Treasury market has grown 70% since the end of 2008; the US corporate bond market is 45% larger and poised to have record issuance of $1.5 trillion in 2014; and as the Federal Reserve Board moves to raise rates, the subsequent exit from fixed income may prove to be sloppy at best, devastating at worst. Traditional liquidity providers may not be able, in fact may not be willing, to provide the orderly withdrawal they have in the past.

According to Perrotta, a tempest has been brewing over the past seven years. The financial crisis, regulatory reform, accommodative monetary policies, the consolidation of assets under management, the proliferation of electronic trading, incredible credit fundamentals, slow economic growth in the U.S., no economic growth in Europe, declining bid/ask spreads, and the absence (and intermittent return) of volatility have been gradually converging to form a massive storm.  Consequently, the confluence of these catalysts has created an environment unlike anything the current generation has endured. “The question on everyone’s mind is whether the storm will pass or will it linger and forever change the landscape.”
The 34-page report’s 31 exhibits illustrate changes underway in terms of the structural components of the market, diving into idiosyncrasies present in the rates, credit and swaps markets to gain a better understanding of what might await market participants once the winds of change subside and the storm passes.

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Ryan McCormack, Invesco
This year sees the 25th anniversary of Invesco’s QQQ, the USD240 billion ETF – the fifth largest ETF in the...
The European ETF market achieved a record 28 per cent growth – reaching over USD1.8 trillion assets under management (AUM)...
Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by