<p>Comments in the Fed’s stability report</p><ul><li>Treasury market has functioned smoothly since last report in May</li><li>Market liquidity remained low in several key areas and that could amplify volatiltiy and may ultimately impair market functioning</li><li>Economic outlook has weakened, uncertainty remains elevated</li></ul><p>US regulators haven’t done enough to prevent air pockets in the bond market. The explosion in short-dated options trading is also something that’s obviously going to end in disaster at some point as well.</p>

This article was written by Adam Button at forexlive.com.