How the U.S. Treasury Futures Market and the Basis Trade Could Be Affected by the Treasury Clearing Mandate: Part 1—A Primer

Ketan B. Patel
Additional contact information
Ketan B. Patel: https://www.chicagofed.org/people/p/patel-ketan

Chicago Fed Letter, 2026, vol. 516, 8

Abstract: A recent mandate by the U.S. Securities and Exchange Commission (SEC) aims to improve the resilience and transparency of markets for U.S. Treasury cash securities and repurchase agreements (repos) by requiring transactions for both be cleared and settled through an authorized central counterparty (CCP). I explore the implications of this mandate for Treasury markets and central clearing in a two-part Chicago Fed Letter series. Part 1 is a primer on Treasury futures and the Treasury cash–futures basis trade—two key features of the Treasury markets that could also be affected by the mandate.

Keywords: Treasury futures; Treasury securities; Treasury repo rate; basis trades; Leverage; Central clearing; Nonbank financial institutions; Nonbank Financial Institutions (NBFIs); Asset pricing; Trading volume; pension funds (search for similar items in EconPapers)
JEL-codes: E43 E44 G12 G13 G18 G23 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.21033/cfl-2026-516

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedhle:102806

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Chicago Fed Letter from Federal Reserve Bank of Chicago Contact information at EDIRC.
Bibliographic data for series maintained by Lauren Wiese ().