What Is the Treasury Bonds Basis Trade, and Is It Over?

Global bond markets have been roiled since the Iran-US conflict began. Surging energy prices together with massive corporate borrowing and ever-expanding government debt issuance have sent Treasury bond prices plummeting, pushing yields to the highest level in nearly two decades. The rout prompted US Treasury Secretary Scott Bessent in August to increase buybacks of the government’s own longer-dated bonds, in...