(Bloomberg) — The 20-year Treasury bond just drove home yet again why it has become a problematic maturity for traders of US government debt.
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In the crucial market for borrowing and lending Treasuries — known as repo for its use of repurchase agreements — demand for the security far outpaced supply for several days last month. The imbalance created a shortage so pronounced that uncompleted trades — known as fails — exceeded all previous totals in the maturity, according to data released Thursday by the Federal Reserve Bank of New York.
Small numbers of fails are common due to human or system errors. But in a pattern that has repeated almost quarterly, these breakdowns in the 20-year dwarfed those in other maturities. In the week ended Sept. 25, fails to deliver the 20-year tallied $22.9 billion, the most on record in the data set, which has been published since 2022. That equated to 94% of the fails…
