‘Dark matter’ bond metric mesmerises Wall Street

Neel Kashkari, president and chief executive officer of the Federal Reserve Bank of Minneapolis, during an interview in New York, US, on Tuesday, Nov. 7, 2023. - Victor J. Blue/Bloomberg

IT’S the buzz word on Wall Street and in the hallways of the Federal Reserve (Fed) and Treasury Department. It’s blamed for triggering bond selloffs, shifts in debt auctions and interest-rate policy.

That few agree on what exactly it reflects, or how to measure it, seems to matter little – the term premium is a powerful new force in the market.