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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 theories as to why the Treasury market experienced periods of volatility during early April 2025.

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

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

"This hearing is entitled: 'Examining Treasury Market Fragilities and Preventative Solutions.'

"Today, we will take a 30-thousand-foot view of Treasury market structure, with a particular focus on the market under stress. We will endeavor to use last month’s volatility as a case study in current market conditions and functioning, and examine what changes may have been helpful in improving the resiliency of the market.

"We can’t overstate the importance of this topic; a highly liquid and resilient Treasury market is fundamental to the global economy.

"There have been a number of episodes in recent years that have made us remember the enormous privilege we have of being the world’s global reserve currency and boast safe haven asset status.

"Last month was one of those moments. We observed almost every measure of liquidity in the Treasury market decline rapidly over a three-day period. Thankfully, the market is resilient and recovered quickly from the stress of broader macroeconomic uncertainty.

"But challenges like last month remind us that we must safeguard our most important asset: our deep, liquid, and healthy sovereign debt market. We can bolster the resilience of the market by learning lessons from market stress that we observed in 2014, 2019, 2020, and a few weeks ago.

"For example, in 2023, the SEC voted to mandate central clearing for cash transactions and repurchase agreements involving Treasuries. This is a fundamental shift and a massive undertaking by market participants. I’ve been working with the SEC to ensure that firms have appropriate time to come into compliance.

"Similarly, we need to get implementation right. There are outstanding questions that need to be addressed, and Chair Atkins is well positioned with broad stakeholder feedback to clarify the rule’s execution.

"I have also repeatedly urged the prudential regulators to exempt Treasuries and reserves from the supplementary leverage ratio and enhanced supplementary leverage ratio due to their low-risk nature. We should incentivize participation in the market, not make it cost prohibitive.

"The Treasury market has doubled in size since I was on the Dodd-Frank conference committee. We should reconsider some of the provisions enacted that have adverse consequences — that disincentivize participation in financing our debt.

"In the last decade we’ve seen dramatic changes in buyers of Treasuries. Some of this is positive — innovation is driving demand.

"On the other hand, we should look carefully at what is causing some investors to leave the market. Our debt instruments need to retain their attractiveness to a broad array of participants.

"I want to be clear, there is no silver bullet here. The Treasury market will always be sensitive to macroeconomic challenges, but there are changes we can consider to improve its resilience. I hope to work with my colleagues on both sides of the aisle to address these constraints."