Treasury Market Liquidity Since April 2025

Henry Dyer and Michael Fleming

No 20260402, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In this post, we examine the evolution of U.S. Treasury market liquidity over the past year, which has witnessed myriad economic and political developments. Liquidity worsened markedly one year ago as volatility increased following the announcement of higher-than-expected tariffs. Liquidity quickly improved when the tariff increases were partially rolled back and then remained fairly stable thereafter (through the end of our sample in February 2026), including after the recent Supreme Court decision striking down the emergency tariffs and the subsequent announcement of new tariffs.

Keywords: Treasury market; liquidity; volatility; tariffs (search for similar items in EconPapers)
JEL-codes: G12 G14 (search for similar items in EconPapers)
Date: 2026-04-02
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DOI: 10.59576/lse.20260402

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