Fed to Weigh Changing Bank Capital Rule Affecting Treasuries

The Federal Reserve will hold a public meeting on June 25 to discuss changes to a capital rule that has served as a constraint on banks’ trading in the $29 trillion Treasuries market during times of stress.

Dollar swap spreads widened to session highs after the Fed’s announcement Tuesday afternoon. The widening was driven by Treasuries outperforming interest-rate swaps.

Read More: Treasuries Outperform Swaps After Fed Sets Meeting on SLR Reform

Fed Chair Jerome Powell has supported possible revisions to supplementary leverage ratio standards to bolster banks’ roles as intermediaries in the market. In February, he told the House Financial ...