Fed Bought $75 Billion a Day to Halt March 2020 Treasury Market Breakdown

2 articles · Updated · adamtooze.substack.com · Aug 22

March 15, 2020 marked the Fed’s emergency Sunday meeting, where officials moved to stop a Treasury-market seizure that had become the central financial threat of the COVID sell-off.
Investors in a dash for cash dumped even safe assets: reserve managers sold $290 billion of Treasuries, mutual funds $270 billion and hedge funds at least $180 billion, leaving dealers unable to absorb off-the-run bonds.
The Fed had already bought $37 billion the prior Friday, then escalated from an initial $40 billion plan to purchases that reached $75 billion a day, helping restore market functioning by late March.
Officials later tied the breakdown to nonbank vulnerabilities—bond-fund redemptions, money-market stress and crowded hedge-fund trades—fault lines that still shadow global bond markets in 2026.