What We Learned About Treasuries on the Night of April 8

Ira Jersey (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:24)

Joe, one of the struggles we're having right now is that so much is happening. So much has been going on that it's hard enough to keep up with the immediate news, but it's especially hard to stop and kind of ponder and analyze what just happened. You sort of move on to the next thing immediately, right?

Joe Weisenthal (0:44)

Well, I've always said hindsight is not 2020, because we all disagree about things that have happened in the past. We know that all the time, so I've always hated that cliche. But at least from the perspective of podcast co-hosts, talking about the past removes the risk to some extent that the episode we're doing is completely null and void by the time it's released.

Tracy Alloway (1:06)

Yeah, this is true. Okay, so hopefully this episode will still be relevant. I think it will be. We're gonna talk about what happened in the bond market, basically in April of 2025 I think that will still be relevant. This was one of the biggest, most dramatic things that happened in a market that really, as I like to say, is supposed to be pretty boring, right? Like people buy US bonds because you want that little bit of income. You want to know that you're getting your money back. You want some certainty. People don't buy it because it's moving around a lot on a day to day basis. And yeah, that's exactly what we saw happen in April, post Trump's Liberation Day on April 2nd. So we should talk about it.

Joe Weisenthal (1:49)

Totally. In particular, the night of April 9th. Now, the 10 year yield actually peaked on April 11th. We're recording this April 24th. The recent peak was April 11th. But April 9th, I will never forget as the night that I got zero sleep because I was just refreshing my Bloomberg app on the couch because I just was watching this yield spike. And everyone was like, it's China dumping. No, it's Japan dumping. No, it's margin calls and everyone's just looking for cash. We need answers for what happened the night of April 8th.

Tracy Alloway (2:17)

This is already revisionist history because you're on the record saying that you did in fact fall asleep on your couch.

Joe Weisenthal (2:23)

Right, I did.

Tracy Alloway (2:23)

And now you're saying you got no sleep.

Joe Weisenthal (2:25)

So yeah, it was late and the peak was actually, I don't know, somewhere in there.

Tracy Alloway (2:29)

Whatever. Point still stands. Stuff was happening in the treasury market. And there was a lot of discussion when it was happening about what was going on. A lot of people reaching for the old bond market bookie man in the form of the basis trade. And then a lot of people talking about other things, like maybe real money sellers who just don't want to be as exposed to US debt anymore because of all the uncertainty from Trump and his tariff regime, et cetera. So we should talk about it.

Joe Weisenthal (2:55)

By the way, 1210 a.m. on the morning of April 9th was that intermediate peak. So I think I was still awake by then. Keep going. Okay.

Tracy Alloway (3:05)

Now that we've settled the most important part of what happened, on that particular day, we do in fact have the perfect guest. We're going to be speaking with someone who we wanted to get on the podcast for a really long time. And shame on us, we didn't do it because he's here at Bloomberg and he's sort of widely available. So we just kind of kept putting it off. But now is the perfect time to do this. So we're going to be speaking with Ira Jersey. He is, of course, Chief Global Interest Rate Strategist for Bloomberg Intelligence. And I'm so glad we can finally have him on to talk about everything that's been happening. Ira, thank you so much for coming on Odd Lots.

Ira Jersey (3:42)

Thanks very much for having me on. I have to admit I am one episode behind. So don't talk about your last episode with me because I will listen to it on my way home today.

Tracy Alloway (3:52)

You're saving it for later. Okay. We won't ruin the plot of the latest episode. Okay. I guess just a color question to start off with. But what have the last few weeks been like for you? You know, you're the Chief Rate Strategist over at BI. There's been no shortage of stuff to write and analyze at the moment. How busy has it been? And how dramatic is everything against your previous experience in bonds?