Press Releases

Today, the House Financial Services Committee is holding a Monetary Policy, Treasury Market Resilience, and Economic Prosperity Task Force hearing, led by Task Force Chair Frank D. Lucas (OK-03), to explore the relationships between public and private actors in the Treasury Markets, and how post Dodd-Frank Act regulations have impacted the Treasury markets.

Read Task Force Chair Lucas’ opening remarks as prepared for delivery:

"Welcome to the next hearing of the Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity.

"This hearing is entitled: 'U.S. Treasury Debt in the Monetary System'. Today, we will evaluate the health of the U.S. Treasury market and hear from our expert panelists on where improvements can be made.

"The U.S. Treasury market is the deepest, strongest, and most liquid in the world. As such, it is the foundation of the global financial system, and we must safeguard its status and functions.

"The Treasury market is invaluable because of its multi-functionality. It equips investors with a safe investment in times of market stress. It serves as a risk-free benchmark for other financial instruments.

"It is also used to finance government operations and manage our debt in addition to being used as an essential tool with which the Fed conducts monetary policy. Put simply, U.S. Treasuries are the most essential asset class to the global economy.

"The willingness of global investors to hold Treasuries, attracted by their low risk and high liquidity, is unrivaled. However, the Treasury market has undergone fundamental changes.

"First, the volume of U.S. debt has been rapidly increasing — our national debt has skyrocketed to over $35 trillion. Supply chain constraints, global conflicts, and irresponsible fiscal policy have contributed to unparalleled and unsustainable growth of our national debt.

"The Treasury Department must market this debt to investors to meet spending obligations. With more than $28 trillion outstanding, the Treasury market has doubled in the last decade alone.

"Second, paired with this explosion in Treasury debt, there are challenging conditions for market participants. The last decade has brought significant changes in technology and regulation, which have impacted the capacity of dealers to provide market liquidity in periods of stress. This was underscored most recently in March 2020, where dramatic volatility in the Treasury market required the Federal Reserve to step in to calm markets. 

"We’ll hear today from our witnesses about what these changes mean for the market and how we should respond. 

"Today’s hearing will also discuss how the Treasury market is an essential tool for the Fed’s monetary policy goals. The Fed currently holds more than four trillion dollars of Treasuries on its balance sheet — the largest single holder of Treasury debt.

"The composition of the Fed’s balance sheet has a profound impact on market conditions and economic stability. We must ensure the Fed’s monetary policy functions aren’t impeding the health of the Treasury market.

"An efficient and resilient Treasury market is paramount to U.S. leadership abroad and the dollar’s status as the world’s reserve currency. This privilege cannot be jeopardized. We must prioritize greater liquidity of the Treasury market — for the United States, for the investor, and for the taxpayer."