US Treasury volatility may record the largest annual decline since 2009

GateUser-6433627c · 2025-12-29T23:45:41+00:00

The Federal Reserve's interest rate cuts effectively alleviate the risk of an economic recession. The volatility index of the US bond market, the ICE BofA MOVE Index, dropped to about 59, the lowest since 2024, and is expected to record the second-largest annual decline since 1988, second only to 2009.

GateUser-6433627c

2025-12-29 23:45:41

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On December 30, under the backdrop of the Federal Reserve’s rate cut effectively alleviating the risk of an economic recession, the key indicator measuring volatility in the US bond market is heading towards its largest annual decline since the global financial crisis. As of last Friday, the ICE BofA MOVE Index (which reflects expected volatility in the bond market) had fallen to about 59, the lowest since October 2024. The index has been steadily declining from a level of approximately 99 at the end of 2024, and is expected to record one of the most significant annual declines since data became available in 1988, second only to the crash in 2009. (Jin10)

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