The transcript discusses the influence of Federal Reserve messaging on fixed income markets, highlighting the challenges of interpreting various data points. It questions the safety of treasuries as a safe haven asset, especially in light of SVB's duration risk issues. Paul McCauley provides insights on the stability of asset prices, emphasizing that while treasuries are credit risk-free, their price stability is not guaranteed. The only truly secure asset is an FDIC-insured deposit, with market outcomes depending on inflation and Fed actions.

What are market participants closely monitoring in relation to the Federal Reserve's actions?

• Only the weekly Fed reports

• The Fed's messaging and various data points

• Just the banking flow data

• Only the PC data

What is the main concern regarding treasuries in the context of the SVB's situation?

• Their duration risk

• Their yield

• Their credit quality

• Their liquidity

How has the bond market paradigm shifted according to the discussion?

• Duration rates are now a concern

• The bond bull market continues

• Rates have remained low

• Treasuries are no longer considered safe

According to Paul McCauley, what is the only 100% safe financial asset?

• Corporate bonds

• 10-year treasuries

• Federally FDIC insured deposits

• Agency mortgage-backed securities

What does Paul McCauley emphasize about treasuries?

• They are neither risk-free from credit nor asset price stability

• They are risk-free from credit but not asset price stability

• They are not risk-free from credit but have asset price stability

• They are risk-free from credit and asset price stability