US Treasury bond wobble heightens concerns over the health of $21tn market

The severity of last week’s US government bond sell-off has rekindled concerns about the health of the world’s largest and most important debt market, adding urgency to regulators’ efforts to address cracks that have emerged during periods of stress.

The $21tn US government debt market started 2021 on the back foot, as investors began pricing in a big economic recovery, the possibility of faster inflation and, in turn, the prospects that the Federal Reserve could begin to raise interest rates earlier than expected.