April 24, 2025 • 10 mins
Caroline Pham, chair of the CFTC discusses how she is pleased with market performance amid recent volatility and that US markets are safe and healthy. She is joined by Bloomberg's Carol Massar and Tim Stenovec.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:06):
Well, the Commodity Futures Trading Commission is asking for public
comment on allowing round the clock trading and derivatives markets.
This is according to a statement put out earlier this week.
The CFTC also wants input on offering perpetual futures. It's
a type of contract that's popular outside the United States
and gaining some traction in digital asset trading. So we
want to talk about that. We want to talk about
(00:28):
the overall massive derivatives market. Delighted to have with us
in our Bloomberg News. DC Bureau is acting chair of
the CFTC, Carolyn Caroline Fam Chair FAM. So nice to
have you with Tim and myself. Let's talk a little
bit about the market volatility that we have seen over
the last month or so.
Speaker 1 (00:48):
What have you seen in the derivatives.
Speaker 2 (00:50):
Market amid that volatility, trends, flows, oversized bets.
Speaker 1 (00:55):
What can you tell us sure of course.
Speaker 3 (00:58):
So one of the things that is really important to
remember about the recent market volatility and all time highs
as far as volume goes, is that the markets operated
in a functional and liquid manner. So we were really
pleased of course, all regulators were concerned about the market conditions.
Speaker 1 (01:14):
You had the very.
Speaker 3 (01:15):
Sharp spikes with the volatility, you had the record all
time flows of volume, but the markets were resilient, there
were adequate margin levels. You know, a lot of people
have thought about what happened in March twenty twenty with
the dash for cash, and we wanted to make sure
that wouldn't happen again. So you saw the global regulatory
community come together with some margin reform, and we're pleased
(01:36):
to see that that all worked as planned and there
were no significant operational issues. So I think relieved to
see that the markets performed well throughout that volatility.
Speaker 4 (01:45):
No significant operational issues. That's certainly great news. Was anything close?
Were there any issues of concern for you?
Speaker 3 (01:53):
No, we were in close contact with all market infrastructures
and market participants throughout the market stress and market conditions,
and we had no significant issues, no issues of concern whatsoever.
Speaker 2 (02:05):
Is there anything you are seeing or hearing? You know,
this is certainly your world. I guess we're trying to
gauge whether or not foreign investors are pulling back on
US assets and dollar based assets, and I'm just curious
in any of the trend flows are Again, this is
your world, and as you talk to officials here in
the United States when it comes to trading and investing,
(02:27):
are you hearing or seeing any of that.
Speaker 3 (02:31):
Look, I think it's very tempting to chase the charts
and to be very focused on sort of the you know,
minute to minute, day to day, you know spikes, But
that's just all part of market functioning. And I think
what you're going to see, as it has been for decades,
that the US is the world's reserve currency, that US
treasuries are as safe haven, and in fact, the global
financial system runs on US treasuries. So I'm confident that
(02:53):
will continue to be the case.
Speaker 4 (02:54):
Are you not concerned that the US is losing its
status as a safe haven? Look what we saw with treasuries,
Look what we've seen with the dollar in recent weeks.
Is that something that's concerning to you?
Speaker 3 (03:06):
Again, I think it's important not to chase the charts
and be focused on the minute to minute or the
day to day. But if you look over all, US
markets have never been safer, sounder.
Speaker 1 (03:15):
Or healthier, all right.
Speaker 2 (03:16):
So one of the things we want to talk about
and we certainly set it up in our introduction to
you is about this twenty four to seven trading and
the CFTC putting out requests for comment on potential uses
and risks to allow for twenty four to seven trading
in the derivatives market. I know you just made the outrage,
but any comments, what are you hearing and kind of
what is top of mind when you think about uses
(03:37):
as well as risks.
Speaker 3 (03:39):
So I'm pleased to talk about this issue because it's
something that we've been seeing in our markets for the
past several years. But until recently, we did not have
an administration and a policy that was pro innovation and
pro growth, both in new products as well as in
new markets. So again, the debate around twenty four to
seven trading and extended trading hours or continuous trading hours
(04:00):
has been very active for the past several years. But
now we're finally moving from talk to action. We've had
a number of exchanges in our markets show their interests
and announce that they are looking at moving to twenty
four to seven trading or twenty four to six trading
or twenty four to five trading.
Speaker 1 (04:16):
And while that.
Speaker 3 (04:17):
Presents a lot of opportunities, and there's a lot of benefits,
particularly when you have an asset class that is liquid
enough to support continuous trading or extended trading hours. We
also have to make sure that we are prepared again
from an operational perspective, because you know, as we discussed
with the recent market volatility, it's absolutely incumbent upon us
as regulators to make sure that the markets are functioning well.
So that's what this request for comment is. It's a
(04:39):
thoughtful set of questions that seeks to understand the uses,
benefits and also risks of extended trading hours or continuous
trading hours.
Speaker 1 (04:46):
I'm really looking forward to the comments.
Speaker 3 (04:48):
Again, this is an area that's been very well debated
for several years. I don't think we're going to see
any surprises, and the safetc. Has always been at the
forefront of market innovation. You know, we saw this with
the creation of financial commodities and diritors based on interest
rates in disease, and then again with all of the
new and interesting asset classes, including crypto.
Speaker 4 (05:08):
Do you think it's a good idea? Do you think
twenty four to seven trading of these products is a
good idea?
Speaker 3 (05:14):
I think twenty four to seven trading is appropriate, but
only when there is enough liquidity. So look at the
FX market. The FX market is already trading on a
continuous basis. There's no closing hours for the FX market.
What we've seen in some of these announcements is that
people are focused on the crypto asset class right now.
That's also one that trades continuously today. So it doesn't
change anything about the current market structure, just only that
(05:38):
it's now happening in a regulated way with our futures products.
Speaker 1 (05:44):
So I think that's going to be very key.
Speaker 3 (05:46):
But again, we want to make sure we are thinking
through all the possible issues, and we want to make
sure we're doing so in an open and transparent way
with lots of public engagement and public comment.
Speaker 2 (05:55):
How do you ensure CHEFAM that what could be a
lack of during the off hours potentially if it's twenty
four to seven trading, that leads to maybe some severe
disconnects in the derivatives market. So I'm just curious, how
do you make sure that doesn't happen.
Speaker 3 (06:15):
That's exactly the key point, because that's why it's so
important to make sure there is sufficient liquidity when you
have something that already trades continuously like FX or like crypto,
it's less of a concern. But we are looking at
everything from a very product specific perspective. We're looking at
each individual product, what asset class it's based on. But
obviously you would have concerns when you're looking at something
(06:36):
that doesn't trade continuously today, something like ag futures for example,
That is something that we would be extremely cautious about
before we move to anything like this type of innovation.
Speaker 2 (06:45):
So it wouldn't be like across the board, there's very
possible that there are carve outs right depending on the market.
Speaker 3 (06:51):
So this is again on a product by product based
So we've had some exchanges that have self certified or
have showed an interest to trade certain products, and these
are all at this point in time based on the
crypto asset class on a twenty four to seven basis
or twenty four six or twenty four to five. Some
of this as future plans, so it's not actually live
before the commission, but again it's something where we're looking
(07:13):
at very specifically on that product basis. It's not going
to be where all of a sudden it's a free
for all in the market.
Speaker 4 (07:19):
You imnagined crypto, so let's go there. How is the
CFTC going to work with the SEC? Of course, Paul
Atkins was sworn in his chair this week. When it
comes to cryptocurrency, what's the plan?
Speaker 3 (07:31):
I think what is great about this current administration is
the clear vision that was expressed in the President's Executive
Order on Digital Assets, the creation of the President's Working
Group on Digital Asset Markets, and the open and continuous
communication we have with all of the relevant stakeholders, including
all the regulators. I've known Chairman Atkins for a long time.
I'm really looking forward to working with the SEC under
(07:51):
his leadership, and this really resets the CFTC and the
SEC back to how it's always traditionally been between the
two of us, where we work together on any issues
of jurisdictional lines. And that's something that's gone all the
way back to at least the eighties, and it's something
that I look forward to continuing as we move forward
through creating more regulatory clarity in the United States for crypto.
Speaker 2 (08:15):
Hey, one thing we got to ask you, Doge it's
gone to the SEC? Has it gone to the c FTC?
Speaker 3 (08:22):
There is no DOGE at the CFTC at this time,
but that doesn't mean that we haven't been doing our
own efforts to make sure that we're being making the
most returned for the American taxpayer and that they're getting
value out of their dollars. So my efficiency initiatives at
the CFTC have already resulted in eighteen million dollars in savings.
That's about five percent of our appropriated budget, about twelve
(08:45):
percent of our non payroll budget. And I'm pleased to
say that this year it looks like on an annualized basis,
we'll be on track to save fifty million dollars and
our budget is only three hundred and sixty five.
Speaker 2 (08:55):
What are you cutting?
Speaker 3 (08:57):
We have some contracts that are accessed. We have had
contracts where I think, you know, just applying basic cost
management principles, people didn't stop to think, do we really
need five of the exact same contract for the exact
same IT service. So it is really just common sense
reviewing our contracts, making sure that we are only paying.
Speaker 1 (09:16):
For what we actually use and what we actually need.
Speaker 2 (09:18):
Is sometime like a redundancy a contract because to make
sure that there's a backup program or that's that wasn't
the case.
Speaker 1 (09:26):
No, that's not the case.
Speaker 3 (09:27):
Let me give you an example, one point four million
dollars on a focus group for consumer fraud.
Speaker 1 (09:34):
We all know that consumer fraud is bad.
Speaker 3 (09:36):
That is money that could be better put towards upgrading
our technology.
Speaker 1 (09:39):
For example.
Speaker 4 (09:40):
Hey, before we let you go, I just wanted to
ask another crypto question. We learned yesterday that the president
is set to have dinner with the top two hundred
and twenty holders of the Trump Mean coin. The issuers
of the cryptocurrency announced yesterday. We saw this on social
I'm curious, just as a regulator, how you look at
the relationship that the president has with this digital asset
(10:01):
and as a person who is in charge of essentially
creating policy on this stuff.
Speaker 1 (10:08):
Our job is.
Speaker 3 (10:09):
To make sure that we have markets that are safe
and that are sound, and that we preserve market integrity,
and that we make sure that most of all, in
looking at market integrity, that the markets are well functioning
and that there is an actual connection to the fundamentals
that are underlying the market. So for us, that is
of course across the entire market. There's no distinction for
(10:32):
anything else.
Speaker 4 (10:33):
Does it make your job more difficult.
Speaker 3 (10:36):
My job is difficult every day. It doesn't make any difference.
Speaker 1 (10:40):
All right, we're going to leave it there.
Speaker 2 (10:41):
Listen, thank you so much, really appreciate your time. We've
been talking with Caroline fam she's the acting chair of
the Commodity Futures Trading Commission.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:06):
Well, the Commodity Futures Trading Commission is asking for public
comment on allowing round the clock trading and derivatives markets.
This is according to a statement put out earlier this week.
The CFTC also wants input on offering perpetual futures. It's
a type of contract that's popular outside the United States
and gaining some traction in digital asset trading. So we
want to talk about that. We want to talk about
(00:28):
the overall massive derivatives market. Delighted to have with us
in our Bloomberg News. DC Bureau is acting chair of
the CFTC, Carolyn Caroline Fam Chair FAM. So nice to
have you with Tim and myself. Let's talk a little
bit about the market volatility that we have seen over
the last month or so.
Speaker 1 (00:48):
What have you seen in the derivatives.
Speaker 2 (00:50):
Market amid that volatility, trends, flows, oversized bets.
Speaker 1 (00:55):
What can you tell us sure of course.
Speaker 3 (00:58):
So one of the things that is really important to
remember about the recent market volatility and all time highs
as far as volume goes, is that the markets operated
in a functional and liquid manner. So we were really
pleased of course, all regulators were concerned about the market conditions.
Speaker 1 (01:14):
You had the very.
Speaker 3 (01:15):
Sharp spikes with the volatility, you had the record all
time flows of volume, but the markets were resilient, there
were adequate margin levels. You know, a lot of people
have thought about what happened in March twenty twenty with
the dash for cash, and we wanted to make sure
that wouldn't happen again. So you saw the global regulatory
community come together with some margin reform, and we're pleased
(01:36):
to see that that all worked as planned and there
were no significant operational issues. So I think relieved to
see that the markets performed well throughout that volatility.
Speaker 4 (01:45):
No significant operational issues. That's certainly great news. Was anything close?
Were there any issues of concern for you?
Speaker 3 (01:53):
No, we were in close contact with all market infrastructures
and market participants throughout the market stress and market conditions,
and we had no significant issues, no issues of concern whatsoever.
Speaker 2 (02:05):
Is there anything you are seeing or hearing? You know,
this is certainly your world. I guess we're trying to
gauge whether or not foreign investors are pulling back on
US assets and dollar based assets, and I'm just curious
in any of the trend flows are Again, this is
your world, and as you talk to officials here in
the United States when it comes to trading and investing,
(02:27):
are you hearing or seeing any of that.
Speaker 3 (02:31):
Look, I think it's very tempting to chase the charts
and to be very focused on sort of the you know,
minute to minute, day to day, you know spikes, But
that's just all part of market functioning. And I think
what you're going to see, as it has been for decades,
that the US is the world's reserve currency, that US
treasuries are as safe haven, and in fact, the global
financial system runs on US treasuries. So I'm confident that
(02:53):
will continue to be the case.
Speaker 4 (02:54):
Are you not concerned that the US is losing its
status as a safe haven? Look what we saw with treasuries,
Look what we've seen with the dollar in recent weeks.
Is that something that's concerning to you?
Speaker 3 (03:06):
Again, I think it's important not to chase the charts
and be focused on the minute to minute or the
day to day. But if you look over all, US
markets have never been safer, sounder.
Speaker 1 (03:15):
Or healthier, all right.
Speaker 2 (03:16):
So one of the things we want to talk about
and we certainly set it up in our introduction to
you is about this twenty four to seven trading and
the CFTC putting out requests for comment on potential uses
and risks to allow for twenty four to seven trading
in the derivatives market. I know you just made the outrage,
but any comments, what are you hearing and kind of
what is top of mind when you think about uses
(03:37):
as well as risks.
Speaker 3 (03:39):
So I'm pleased to talk about this issue because it's
something that we've been seeing in our markets for the
past several years. But until recently, we did not have
an administration and a policy that was pro innovation and
pro growth, both in new products as well as in
new markets. So again, the debate around twenty four to
seven trading and extended trading hours or continuous trading hours
(04:00):
has been very active for the past several years. But
now we're finally moving from talk to action. We've had
a number of exchanges in our markets show their interests
and announce that they are looking at moving to twenty
four to seven trading or twenty four to six trading
or twenty four to five trading.
Speaker 1 (04:16):
And while that.
Speaker 3 (04:17):
Presents a lot of opportunities, and there's a lot of benefits,
particularly when you have an asset class that is liquid
enough to support continuous trading or extended trading hours. We
also have to make sure that we are prepared again
from an operational perspective, because you know, as we discussed
with the recent market volatility, it's absolutely incumbent upon us
as regulators to make sure that the markets are functioning well.
So that's what this request for comment is. It's a
(04:39):
thoughtful set of questions that seeks to understand the uses,
benefits and also risks of extended trading hours or continuous
trading hours.
Speaker 1 (04:46):
I'm really looking forward to the comments.
Speaker 3 (04:48):
Again, this is an area that's been very well debated
for several years. I don't think we're going to see
any surprises, and the safetc. Has always been at the
forefront of market innovation. You know, we saw this with
the creation of financial commodities and diritors based on interest
rates in disease, and then again with all of the
new and interesting asset classes, including crypto.
Speaker 4 (05:08):
Do you think it's a good idea? Do you think
twenty four to seven trading of these products is a
good idea?
Speaker 3 (05:14):
I think twenty four to seven trading is appropriate, but
only when there is enough liquidity. So look at the
FX market. The FX market is already trading on a
continuous basis. There's no closing hours for the FX market.
What we've seen in some of these announcements is that
people are focused on the crypto asset class right now.
That's also one that trades continuously today. So it doesn't
change anything about the current market structure, just only that
(05:38):
it's now happening in a regulated way with our futures products.
Speaker 1 (05:44):
So I think that's going to be very key.
Speaker 3 (05:46):
But again, we want to make sure we are thinking
through all the possible issues, and we want to make
sure we're doing so in an open and transparent way
with lots of public engagement and public comment.
Speaker 2 (05:55):
How do you ensure CHEFAM that what could be a
lack of during the off hours potentially if it's twenty
four to seven trading, that leads to maybe some severe
disconnects in the derivatives market. So I'm just curious, how
do you make sure that doesn't happen.
Speaker 3 (06:15):
That's exactly the key point, because that's why it's so
important to make sure there is sufficient liquidity when you
have something that already trades continuously like FX or like crypto,
it's less of a concern. But we are looking at
everything from a very product specific perspective. We're looking at
each individual product, what asset class it's based on. But
obviously you would have concerns when you're looking at something
(06:36):
that doesn't trade continuously today, something like ag futures for example,
That is something that we would be extremely cautious about
before we move to anything like this type of innovation.
Speaker 2 (06:45):
So it wouldn't be like across the board, there's very
possible that there are carve outs right depending on the market.
Speaker 3 (06:51):
So this is again on a product by product based
So we've had some exchanges that have self certified or
have showed an interest to trade certain products, and these
are all at this point in time based on the
crypto asset class on a twenty four to seven basis
or twenty four six or twenty four to five. Some
of this as future plans, so it's not actually live
before the commission, but again it's something where we're looking
(07:13):
at very specifically on that product basis. It's not going
to be where all of a sudden it's a free
for all in the market.
Speaker 4 (07:19):
You imnagined crypto, so let's go there. How is the
CFTC going to work with the SEC? Of course, Paul
Atkins was sworn in his chair this week. When it
comes to cryptocurrency, what's the plan?
Speaker 3 (07:31):
I think what is great about this current administration is
the clear vision that was expressed in the President's Executive
Order on Digital Assets, the creation of the President's Working
Group on Digital Asset Markets, and the open and continuous
communication we have with all of the relevant stakeholders, including
all the regulators. I've known Chairman Atkins for a long time.
I'm really looking forward to working with the SEC under
(07:51):
his leadership, and this really resets the CFTC and the
SEC back to how it's always traditionally been between the
two of us, where we work together on any issues
of jurisdictional lines. And that's something that's gone all the
way back to at least the eighties, and it's something
that I look forward to continuing as we move forward
through creating more regulatory clarity in the United States for crypto.
Speaker 2 (08:15):
Hey, one thing we got to ask you, Doge it's
gone to the SEC? Has it gone to the c FTC?
Speaker 3 (08:22):
There is no DOGE at the CFTC at this time,
but that doesn't mean that we haven't been doing our
own efforts to make sure that we're being making the
most returned for the American taxpayer and that they're getting
value out of their dollars. So my efficiency initiatives at
the CFTC have already resulted in eighteen million dollars in savings.
That's about five percent of our appropriated budget, about twelve
(08:45):
percent of our non payroll budget. And I'm pleased to
say that this year it looks like on an annualized basis,
we'll be on track to save fifty million dollars and
our budget is only three hundred and sixty five.
Speaker 2 (08:55):
What are you cutting?
Speaker 3 (08:57):
We have some contracts that are accessed. We have had
contracts where I think, you know, just applying basic cost
management principles, people didn't stop to think, do we really
need five of the exact same contract for the exact
same IT service. So it is really just common sense
reviewing our contracts, making sure that we are only paying.
Speaker 1 (09:16):
For what we actually use and what we actually need.
Speaker 2 (09:18):
Is sometime like a redundancy a contract because to make
sure that there's a backup program or that's that wasn't
the case.
Speaker 1 (09:26):
No, that's not the case.
Speaker 3 (09:27):
Let me give you an example, one point four million
dollars on a focus group for consumer fraud.
Speaker 1 (09:34):
We all know that consumer fraud is bad.
Speaker 3 (09:36):
That is money that could be better put towards upgrading
our technology.
Speaker 1 (09:39):
For example.
Speaker 4 (09:40):
Hey, before we let you go, I just wanted to
ask another crypto question. We learned yesterday that the president
is set to have dinner with the top two hundred
and twenty holders of the Trump Mean coin. The issuers
of the cryptocurrency announced yesterday. We saw this on social
I'm curious, just as a regulator, how you look at
the relationship that the president has with this digital asset
(10:01):
and as a person who is in charge of essentially
creating policy on this stuff.
Speaker 1 (10:08):
Our job is.
Speaker 3 (10:09):
To make sure that we have markets that are safe
and that are sound, and that we preserve market integrity,
and that we make sure that most of all, in
looking at market integrity, that the markets are well functioning
and that there is an actual connection to the fundamentals
that are underlying the market. So for us, that is
of course across the entire market. There's no distinction for
(10:32):
anything else.
Speaker 4 (10:33):
Does it make your job more difficult.
Speaker 3 (10:36):
My job is difficult every day. It doesn't make any difference.
Speaker 1 (10:40):
All right, we're going to leave it there.
Speaker 2 (10:41):
Listen, thank you so much, really appreciate your time. We've
been talking with Caroline fam she's the acting chair of
the Commodity Futures Trading Commission.
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