Bonds

Fixed-income trading revenue declined 17%, the firm said in a statement Tuesday, leaving Goldman the only major Wall Street bank so far to have posted a drop for that business.

Two-year Treasury yields slid a percentage point over three days in March, the most since 1982. Gone are the days when inflation was the main menace.

The two-year U.S. rate, which is the most sensitive to monetary policy, slid for a fifth day, its longest streak since July 2022. Economists now assign a 65% probability of a U.S. recession.

Traders flocked to shorter-maturity Treasuries, driving two-year yields down 18 basis points at one stage. The 10-year note's rate was 1.5 percentage point lower than the 3-month T-bill.

Traders got another taste this week of the contrasting forces battering the market with bonds falling after a surprise cut to global oil production, only to bounce back hours later following weak economic data.

The disparity comes as fixed-income traders allocate money into safer credits, such as investment-grade or US government debt, amid concerns that borrowers in the lowest-rated rung of corporate debt are even more at risk of defaulting than usual.

Government bonds surged and stocks slid as signs of distress at a California lender spurred broader worries over the US banking sector's debt holdings.

Traders in the hyper-liquid world of ETFs ditched equities and corporate bonds and headed for the safety of government debt as yields broke out anew.

Companies issued more than $18 billion of US dollar-denominated bonds this past week at an average concession of -1 basis point, on the back of orders that were five times the offering size.

Wednesday afternoon was full of drama as traders first took hope from the central bank's statement but then slumped following stern comments by Chair Jerome Powell.