Good morning everyone and welcome to the New York Fed. It’s a pleasure to be speaking at the fifth annual U.S. Treasury Market Conference.
This conference is particularly valuable because it brings together market participants and five public sector bodies—the New York Fed, the Board of Governors, the Treasury, the SEC, and the CFTC—to discuss the U.S. Treasury market.
The Treasury market is arguably the most important market in the world, and today is a unique opportunity to discuss some of the big topics in front of us. Increasing transparency, preparing for future risks, and taking advantage of innovation in this market are vital areas of discussion.
This morning, I’ll begin with some observations on recent volatility in money markets and the Fed’s approach to support stability in this critical part of the financial system as we carry out the FOMC’s monetary policy decisions.
I’ll then pivot to a different but related topic: the transition away from LIBOR. I think I can get away with it because this conference’s five sponsoring agencies, which first came together following the “flash rally” in 2014, also all play a vital role in facilitating the industry’s move to more robust reference rates. Crucially, they are ex officio members of the Alternative Reference Rates Committee (ARRC), the private sector group convened to guide the transition away from LIBOR. And of course the Secured Overnight Financing Rate (SOFR), the ARRC’s selected replacement for U.S. dollar LIBOR, reflects transactions that finance U.S. Treasury securities.
Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System.
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