By Telis Demos

Surges in Treasury yields and historic stock-index moves are signs of how uncertain people are about the economic outlook. But from a market-plumbing perspective, bankers on Friday did not see disorder in the price action.

Bankers did report deleveraging, or reducing borrowing, among some clients, particularly hedge funds. Yet they did not describe a broader effort to liquidate holdings that would suggest a broken market.

BNY Chief Executive Robin Vince told analysts on Friday that "a lot of the activity has been de-levering by people who've been raising cash to pay back lines, not raising cash just to have more dry powder on the sidelines." He said that there had not been as much liquidation by longer-term investment managers, which is typically when cash ends up at the bank.

In response to an analyst question about the Treasury market, Vince said: "The rails of the system are working really well. We're seeing high volumes, yes, for sure, but everything's functioning really well."

"We're just seeing situations where liquidity is reduced and therefore people are having to pay up," he added.

As far as intervention by the Federal Reserve goes, Vince said that history suggests the Fed will act when they view the market as "fundamentally dysfunctional or dislocated, where it's not possible to move risk." He added: "That's absolutely not what we have seen."

From other bank-earnings calls:

-- JPMorgan Chase Chief Executive Jamie Dimon said that he didn't yet expect the Fed to intervene in the Treasury market, because unlike market conditions during the start of the Covid-19 pandemic, "you don't have all those issues yet. They'll do it when they start to panic a little bit and we don't know if and when that's going to happen."

-- Morgan Stanley chief executive Ted Pick told analysts: "For all of the concerns about what could come down the road in the real economy, the market making and the ability to transact to clients as they up-and-down their leverage levels has been very orderly."

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

April 11, 2025 14:00 ET (18:00 GMT)

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