BofA Warns Bond-Market Volatility Increases Deleveraging Risk
Bank of America Securities has raised concerns about increased volatility in the bond market, warning that it could lead to broader deleveraging. The firm highlighted a sharp rise in the MOVE Index—a key measure of Treasury volatility—which surged by 35% over two days amid ongoing economic uncertainty. The spike suggests growing investor anxiety and potential instability across fixed-income markets. BofA's strategist Michael Hartnett emphasized that such rapid shifts could trigger broader deleveraging, where investors aggressively reduce debt exposure to manage risk. This scenario may ripple through financial systems globally as liquidity tightens. Market participants are now closely watching how central banks respond and whether the volatility persists or stabilizes in coming weeks.
Topics: bond markets deleveraging risk volatility