El-Erian and others worry that an artificial environment of near-free money is masking serious underlying ailments and may be storing up problems for a future reckoning. This era of perpetually cheap money has kept alive some debt-ridden “zombie” companies that would have failed if rates were at traditional levels; widened the wealth gap between rich and poor; and distorted financial decisions, he said.

A group of European and UK banks is considering building its own fixed-income trading software, in a move that could allow members to cut ties with the market’s biggest vendor, Ion. The project, dubbed Cohesion, is in its early days but pitches were invited from potential builders of the technology this summer. The banks are now understood to be deciding whether to commit further time and money to the work.

Trumid Financial, the New-York based financial technology company and electronic trading platform for corporate bonds, today announced a strategic partnership with Citigroup to explore innovative solutions to provide liquidity and connectivity to fixed income institutional clients. Trumid’s trading platform aims to increase the volume of corporate bonds traded electronically.

After years of tiptoeing around systematic styles in debt markets, investors are starting to believe in the promise — ushering in a new world of advanced statistics and robot-learning. About 70% of institutional and 78% of wholesale investors reckon the strategy of dissecting securities by their factors, like value and momentum, are applicable to fixed income, according to a study by Invesco Ltd.

The fixed income market is witnessing an explosion of market data, which presents both benefits and challenges. With this plethora of available information, traders are faced with the task of forming a truly holistic view of available opportunities, and must do so with speed and accuracy.

“There is a push now for direct connectivity between myself and the banks, and I think the fallout from that will be, I don’t need to use one of the big three platforms to trade, if I can have five or six direct feeds.”

Pricing for investment-grade credit below $2 million is now completely electronic, with plans to expand, said Adam Korn, global head of securities division “strats” and technology. “If you come back in a year or two, I suspect we will have automated the $2-$5 million segment of the investment grade,” Korn said in an interview. 

AllianceBernstein Holding LP has introduced a robot to execute corporate-bond trades directly with bots at dealer counterparties. The $587 billion asset manager used the system in August to complete three trades with similar digital assistants at Citigroup Inc., Morgan Stanley and Royal Bank of Canada.

“The big theme here is a search for yield and a search for return,” said Rebecca Patterson, chief investment officer at Bessemer Trust. “As you have more and more negative yielding government bonds around the world, investors that need income are looking to the US.”

The company is considering an expansion into corporate bond trading and is expected to hire Frederic Boyer, who most recently worked for Ken Griffin’s Citadel LLC as a managing director and head of quantitative research for global credit.