How Has Treasury Market Liquidity Fared in 2025?

Michael Fleming

No 20251112, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In 2025, the Federal Reserve has cut interest rates, trade policy has shifted abruptly, and economic policy uncertainty has increased. How have these developments affected the functioning of the key U.S. Treasury securities market? In this post, we return to some familiar metrics to assess the recent behavior of Treasury market liquidity. We find that liquidity briefly worsened around the April 2025 tariff announcements but that its relation to Treasury volatility has been similar to what it was in the past.

Keywords: Treasury market; liquidity; volatility; tariffs (search for similar items in EconPapers)
JEL-codes: G12 G14 (search for similar items in EconPapers)
Date: 2025-11-12
New Economics Papers: this item is included in nep-ifn and nep-mst
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:102093

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DOI: 10.59576/lse.20251112

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